Correlation Between I 80 and Prime Dividend

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

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

Diversification Opportunities for I 80 and Prime Dividend

-0.6

Correlation Coefficient

I 80  Prime Dividend

Excellent diversification

The 3 months correlation between IAU and Prime is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding i 80 Gold Corp and Prime Dividend Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Dividend Corp and I 80 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 i 80 Gold Corp are associated (or correlated) with Prime Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Dividend Corp has no effect on the direction of I 80 i.e., I 80 and Prime Dividend go up and down completely randomly.

Pair Corralation between I 80 and Prime Dividend

Assuming the 90 days trading horizon i 80 Gold Corp is expected to generate 2.96 times more return on investment than Prime Dividend. However, I 80 is 2.96 times more volatile than Prime Dividend Corp. It trades about 0.09 of its potential returns per unit of risk. Prime Dividend Corp is currently generating about -0.08 per unit of risk. If you would invest  74.00  in i 80 Gold Corp on October 24, 2024 and sell it today you would earn a total of  6.00  from holding i 80 Gold Corp or generate 8.11% return on investment over 90 days.

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

i 80 Gold Corp  vs.  Prime Dividend Corp

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Prime Dividend Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Prime Dividend Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Prime Dividend may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with I 80 and Prime Dividend

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

The idea behind i 80 Gold Corp and Prime Dividend 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.