Correlation Between I 80 and TC Energy

Can any of the company-specific risk be diversified away by investing in both I 80 and TC Energy 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 TC Energy 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 TC Energy Corp, you can compare the effects of market volatilities on I 80 and TC Energy 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of I 80 and TC Energy.

Diversification Opportunities for I 80 and TC Energy

-0.58

Correlation Coefficient

I 80  TC Energy

Excellent diversification

The 3 months correlation between IAU and TRP is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding i 80 Gold Corp and TC Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy Corp has no effect on the direction of I 80 i.e., I 80 and TC Energy go up and down completely randomly.

Pair Corralation between I 80 and TC Energy

Assuming the 90 days trading horizon i 80 Gold Corp is expected to under-perform the TC Energy. In addition to that, I 80 is 3.46 times more volatile than TC Energy Corp. It trades about -0.03 of its total potential returns per unit of risk. TC Energy Corp is currently generating about 0.06 per unit of volatility. If you would invest  4,585  in TC Energy Corp on October 9, 2024 and sell it today you would earn a total of  2,202  from holding TC Energy Corp or generate 48.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

i 80 Gold Corp  vs.  TC Energy 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 weak 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.

TC Energy Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TC Energy Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TC Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with I 80 and TC Energy

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

The idea behind i 80 Gold Corp and TC Energy 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.