Correlation Between GoGold Resources and I 80

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

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

Diversification Opportunities for GoGold Resources and I 80

0.38

Correlation Coefficient

GoGold Resources  I 80

Weak diversification

The 3 months correlation between GoGold and IAU is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding GoGold Resources 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 GoGold Resources 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 GoGold Resources 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 GoGold Resources i.e., GoGold Resources and I 80 go up and down completely randomly.

Pair Corralation between GoGold Resources and I 80

Assuming the 90 days trading horizon GoGold Resources is expected to generate 0.4 times more return on investment than I 80. However, GoGold Resources is 2.5 times less risky than I 80. It trades about 0.08 of its potential returns per unit of risk. i 80 Gold Corp is currently generating about -0.01 per unit of risk. If you would invest  112.00  in GoGold Resources on September 3, 2024 and sell it today you would earn a total of  18.00  from holding GoGold Resources or generate 16.07% return on investment over 90 days.

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

GoGold Resources  vs.  i 80 Gold Corp

GoGold Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GoGold Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, GoGold Resources displayed solid returns over the last few months and may actually be approaching a breakup point.

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 very healthy basic indicators, I 80 is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GoGold Resources and I 80

The main advantage of trading using opposite GoGold Resources and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoGold Resources 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 GoGold Resources 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.