Correlation Between Vista Gold and International Tower

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

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

Diversification Opportunities for Vista Gold and International Tower

0.86

Correlation Coefficient

Vista Gold  International Tower

Very poor diversification

The 3 months correlation between Vista and International is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Vista Gold and International Tower Hill in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Tower Hill and Vista 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 Vista Gold are associated (or correlated) with International Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Tower Hill has no effect on the direction of Vista Gold i.e., Vista Gold and International Tower go up and down completely randomly.

Pair Corralation between Vista Gold and International Tower

Considering the 90-day investment horizon Vista Gold is expected to generate 1.17 times less return on investment than International Tower. But when comparing it to its historical volatility, Vista Gold is 1.22 times less risky than International Tower. It trades about 0.17 of its potential returns per unit of risk. International Tower Hill is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  44.00  in International Tower Hill on December 30, 2024 and sell it today you would earn a total of  21.00  from holding International Tower Hill or generate 47.73% return on investment over 90 days.

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

Vista Gold  vs.  International Tower Hill

Vista Gold

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Gold are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Vista Gold showed solid returns over the last few months and may actually be approaching a breakup point.

International Tower Hill

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International Tower Hill are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, International Tower displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vista Gold and International Tower

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

The idea behind Vista Gold and International Tower Hill 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.