Correlation Between Torex Gold and I 80

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

Diversification Opportunities for Torex Gold and I 80

-0.1

Correlation Coefficient

Torex Gold  I 80

Good diversification

The 3 months correlation between Torex and IAUX is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Torex Gold Resources 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 Torex 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 Torex Gold Resources 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 Torex Gold i.e., Torex Gold and I 80 go up and down completely randomly.

Pair Corralation between Torex Gold and I 80

Assuming the 90 days horizon Torex Gold Resources is expected to generate 0.22 times more return on investment than I 80. However, Torex Gold Resources is 4.6 times less risky than I 80. It trades about -0.02 of its potential returns per unit of risk. I 80 Gold Corp is currently generating about -0.03 per unit of risk. If you would invest  2,176  in Torex Gold Resources on August 30, 2024 and sell it today you would lose (66.00) from holding Torex Gold Resources or give up 3.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Torex Gold Resources  vs.  I 80 Gold Corp

Torex Gold Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Torex Gold Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Torex Gold may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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 fairly strong basic indicators, I 80 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Torex Gold and I 80

The main advantage of trading using opposite Torex Gold and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Torex 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 Torex Gold Resources 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.