Correlation Between I 80 and Liberty Gold

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

Diversification Opportunities for I 80 and Liberty Gold

0.87

Correlation Coefficient

I 80  Liberty Gold

Very poor diversification

The 3 months correlation between IAUX and Liberty is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding I 80 Gold Corp and Liberty Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty 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 Liberty Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Gold Corp has no effect on the direction of I 80 i.e., I 80 and Liberty Gold go up and down completely randomly.

Pair Corralation between I 80 and Liberty Gold

Given the investment horizon of 90 days I 80 Gold Corp is expected to generate 2.74 times more return on investment than Liberty Gold. However, I 80 is 2.74 times more volatile than Liberty Gold Corp. It trades about 0.19 of its potential returns per unit of risk. Liberty Gold Corp is currently generating about -0.17 per unit of risk. If you would invest  39.00  in I 80 Gold Corp on September 15, 2024 and sell it today you would earn a total of  14.00  from holding I 80 Gold Corp or generate 35.9% return on investment over 90 days.

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

I 80 Gold Corp  vs.  Liberty 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.

Liberty Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with I 80 and Liberty Gold

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

The idea behind I 80 Gold Corp and Liberty 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.