Correlation Between I 80 and Commerce Split

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

Diversification Opportunities for I 80 and Commerce Split

-0.7

Correlation Coefficient

I 80  Commerce Split

Excellent diversification

The 3 months correlation between IAU and Commerce is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding i 80 Gold Corp and Commerce Split Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Split 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 Commerce Split. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Split Corp has no effect on the direction of I 80 i.e., I 80 and Commerce Split go up and down completely randomly.

Pair Corralation between I 80 and Commerce Split

Assuming the 90 days trading horizon i 80 Gold Corp is expected to generate 6.53 times more return on investment than Commerce Split. However, I 80 is 6.53 times more volatile than Commerce Split Corp. It trades about 0.03 of its potential returns per unit of risk. Commerce Split Corp is currently generating about -0.32 per unit of risk. If you would invest  82.00  in i 80 Gold Corp on October 9, 2024 and sell it today you would earn a total of  0.00  from holding i 80 Gold Corp or generate 0.0% 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.  Commerce Split 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.

Commerce Split Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Commerce Split Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, Commerce Split may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with I 80 and Commerce Split

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

The idea behind i 80 Gold Corp and Commerce Split 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.