Correlation Between World Copper and IAMGold
Can any of the company-specific risk be diversified away by investing in both World Copper and IAMGold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining World Copper and IAMGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Copper and IAMGold, you can compare the effects of market volatilities on World Copper and IAMGold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in World Copper with a short position of IAMGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Copper and IAMGold.
Diversification Opportunities for World Copper and IAMGold
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between World and IAMGold is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding World Copper and IAMGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAMGold and World Copper is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on World Copper are associated (or correlated) with IAMGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAMGold has no effect on the direction of World Copper i.e., World Copper and IAMGold go up and down completely randomly.
Pair Corralation between World Copper and IAMGold
Assuming the 90 days horizon World Copper is expected to generate 3.68 times more return on investment than IAMGold. However, World Copper is 3.68 times more volatile than IAMGold. It trades about 0.05 of its potential returns per unit of risk. IAMGold is currently generating about -0.21 per unit of risk. If you would invest 4.50 in World Copper on December 6, 2024 and sell it today you would earn a total of 0.00 from holding World Copper or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Copper vs. IAMGold
Performance |
| Timeline |
| World Copper |
| IAMGold |
World Copper and IAMGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Copper and IAMGold
The main advantage of trading using opposite World Copper and IAMGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Copper position performs unexpectedly, IAMGold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IAMGold will offset losses from the drop in IAMGold's long position.| World Copper vs. Bell Copper Corp | World Copper vs. Northwest Copper Corp | World Copper vs. Wealth Minerals |
| IAMGold vs. Eldorado Gold Corp | IAMGold vs. Kinross Gold Corp | IAMGold vs. Alamos Gold | IAMGold vs. New Gold |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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