Correlation Between Independence Gold and I 80

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

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

Diversification Opportunities for Independence Gold and I 80

0.42

Correlation Coefficient

Independence Gold  I 80

Very weak diversification

The 3 months correlation between Independence and IAUX is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Independence Gold Corp and I 80 Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I 80 Gold and Independence Gold 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 Independence Gold Corp are associated (or correlated) with I 80. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I 80 Gold has no effect on the direction of Independence Gold i.e., Independence Gold and I 80 go up and down completely randomly.

Pair Corralation between Independence Gold and I 80

Assuming the 90 days horizon Independence Gold Corp is expected to generate 0.57 times more return on investment than I 80. However, Independence Gold Corp is 1.76 times less risky than I 80. It trades about 0.01 of its potential returns per unit of risk. I 80 Gold Corp is currently generating about -0.05 per unit of risk. If you would invest  18.00  in Independence Gold Corp on September 14, 2024 and sell it today you would lose (1.00) from holding Independence Gold Corp or give up 5.56% of portfolio value over 90 days.

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

Independence Gold Corp  vs.  I 80 Gold Corp

Independence Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Independence Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Independence Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Independence Gold and I 80

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

The idea behind Independence Gold Corp and I 80 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.