Correlation Between Commercial Metals and I 80

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

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

Diversification Opportunities for Commercial Metals and I 80

-0.54

Correlation Coefficient

Commercial Metals  I 80

Excellent diversification

The 3 months correlation between Commercial and IAUX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Metals 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 Commercial Metals 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 Commercial Metals 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 Commercial Metals i.e., Commercial Metals and I 80 go up and down completely randomly.

Pair Corralation between Commercial Metals and I 80

Considering the 90-day investment horizon Commercial Metals is expected to generate 0.46 times more return on investment than I 80. However, Commercial Metals is 2.18 times less risky than I 80. It trades about -0.39 of its potential returns per unit of risk. I 80 Gold Corp is currently generating about -0.23 per unit of risk. If you would invest  6,044  in Commercial Metals on September 22, 2024 and sell it today you would lose (1,017) from holding Commercial Metals or give up 16.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Commercial Metals  vs.  I 80 Gold Corp

Commercial Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commercial Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Commercial Metals is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

I 80 Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days I 80 Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Commercial Metals and I 80

The main advantage of trading using opposite Commercial Metals and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Metals 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 Commercial Metals 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.