Correlation Between Sokoman Minerals and I 80

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

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

Diversification Opportunities for Sokoman Minerals and I 80

0.3

Correlation Coefficient

Sokoman Minerals  I 80

Weak diversification

The 3 months correlation between Sokoman and IAUX is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sokoman Minerals 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 Sokoman Minerals 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 Sokoman Minerals 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 Sokoman Minerals i.e., Sokoman Minerals and I 80 go up and down completely randomly.

Pair Corralation between Sokoman Minerals and I 80

Assuming the 90 days horizon Sokoman Minerals Corp is expected to under-perform the I 80. In addition to that, Sokoman Minerals is 2.14 times more volatile than I 80 Gold Corp. It trades about -0.1 of its total potential returns per unit of risk. I 80 Gold Corp is currently generating about 0.33 per unit of volatility. If you would invest  56.00  in I 80 Gold Corp on December 4, 2024 and sell it today you would earn a total of  18.79  from holding I 80 Gold Corp or generate 33.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Sokoman Minerals Corp  vs.  I 80 Gold Corp

Sokoman Minerals Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sokoman Minerals Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Sokoman Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

I 80 Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in I 80 Gold Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, I 80 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sokoman Minerals and I 80

The main advantage of trading using opposite Sokoman Minerals and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sokoman Minerals 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 Sokoman Minerals 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.