Correlation Between Baru Gold and I 80

Can any of the company-specific risk be diversified away by investing in both Baru Gold and I 80 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 Baru Gold and I 80 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baru Gold Corp and I 80 Gold Corp, you can compare the effects of market volatilities on Baru Gold and I 80 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 Baru Gold with a short position of I 80. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baru Gold and I 80.

Diversification Opportunities for Baru Gold and I 80

0.02

Correlation Coefficient

Baru Gold  I 80

Significant diversification

The 3 months correlation between Baru and IAUX is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Baru Gold Corp and I 80 Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I 80 Gold and Baru Gold 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 Baru Gold Corp are associated (or correlated) with I 80. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I 80 Gold has no effect on the direction of Baru Gold i.e., Baru Gold and I 80 go up and down completely randomly.

Pair Corralation between Baru Gold and I 80

Assuming the 90 days horizon Baru Gold Corp is expected to under-perform the I 80. In addition to that, Baru Gold is 1.59 times more volatile than I 80 Gold Corp. It trades about -0.12 of its total potential returns per unit of risk. I 80 Gold Corp is currently generating about 0.09 per unit of volatility. If you would invest  51.00  in I 80 Gold Corp on December 27, 2024 and sell it today you would earn a total of  12.00  from holding I 80 Gold Corp or generate 23.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Baru Gold Corp  vs.  I 80 Gold Corp

Baru Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Baru Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

I 80 Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in I 80 Gold Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, I 80 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Baru Gold and I 80

The main advantage of trading using opposite Baru Gold and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baru Gold position performs unexpectedly, I 80 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 I 80 will offset losses from the drop in I 80's long position.

The idea behind Baru Gold Corp and I 80 Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.