Correlation Between IAMGold and I 80

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

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

Diversification Opportunities for IAMGold and I 80

0.04

Correlation Coefficient

IAMGold  I 80

Significant diversification

The 3 months correlation between IAMGold and IAUX is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding IAMGold 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 IAMGold 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 IAMGold 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 IAMGold i.e., IAMGold and I 80 go up and down completely randomly.

Pair Corralation between IAMGold and I 80

Considering the 90-day investment horizon IAMGold is expected to generate 0.71 times more return on investment than I 80. However, IAMGold is 1.4 times less risky than I 80. It trades about 0.06 of its potential returns per unit of risk. I 80 Gold Corp is currently generating about -0.04 per unit of risk. If you would invest  260.00  in IAMGold on October 1, 2024 and sell it today you would earn a total of  256.00  from holding IAMGold or generate 98.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

IAMGold  vs.  I 80 Gold Corp

IAMGold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IAMGold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IAMGold is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

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 IAMGold and I 80

The main advantage of trading using opposite IAMGold and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAMGold 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 IAMGold 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.