Correlation Between I 80 and Dakota Gold

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

Diversification Opportunities for I 80 and Dakota Gold

0.58

Correlation Coefficient

I 80  Dakota Gold

Very weak diversification

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

Pair Corralation between I 80 and Dakota Gold

Given the investment horizon of 90 days I 80 Gold Corp is expected to under-perform the Dakota Gold. In addition to that, I 80 is 3.39 times more volatile than Dakota Gold Corp. It trades about -0.06 of its total potential returns per unit of risk. Dakota Gold Corp is currently generating about -0.02 per unit of volatility. If you would invest  237.00  in Dakota Gold Corp on September 15, 2024 and sell it today you would lose (13.00) from holding Dakota Gold Corp or give up 5.49% of portfolio value over 90 days.

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

I 80 Gold Corp  vs.  Dakota Gold 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 fragile 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.

Dakota Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dakota Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Dakota Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with I 80 and Dakota Gold

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

The idea behind I 80 Gold Corp and Dakota 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.