Correlation Between Contango ORE and I 80

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

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

Diversification Opportunities for Contango ORE and I 80

0.5

Correlation Coefficient

Contango ORE  I 80

Very weak diversification

The 3 months correlation between Contango and IAUX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Contango ORE 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 Contango ORE 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 Contango ORE 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 Contango ORE i.e., Contango ORE and I 80 go up and down completely randomly.

Pair Corralation between Contango ORE and I 80

Given the investment horizon of 90 days Contango ORE is expected to generate 0.86 times more return on investment than I 80. However, Contango ORE is 1.16 times less risky than I 80. It trades about 0.0 of its potential returns per unit of risk. I 80 Gold Corp is currently generating about -0.04 per unit of risk. If you would invest  2,238  in Contango ORE on September 3, 2024 and sell it today you would lose (830.00) from holding Contango ORE or give up 37.09% of portfolio value over 90 days.

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

Contango ORE  vs.  I 80 Gold Corp

Contango ORE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Contango ORE 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 technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Contango ORE and I 80

The main advantage of trading using opposite Contango ORE and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contango ORE 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 Contango ORE 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.