Correlation Between Irving Resources and US Gold

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

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

Diversification Opportunities for Irving Resources and US Gold

-0.54

Correlation Coefficient

Irving Resources  US Gold

Excellent diversification

The 3 months correlation between Irving and USAU is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Irving Resources and US Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Gold Corp and Irving Resources 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 Irving Resources are associated (or correlated) with US Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Gold Corp has no effect on the direction of Irving Resources i.e., Irving Resources and US Gold go up and down completely randomly.

Pair Corralation between Irving Resources and US Gold

Assuming the 90 days horizon Irving Resources is expected to under-perform the US Gold. In addition to that, Irving Resources is 1.68 times more volatile than US Gold Corp. It trades about -0.04 of its total potential returns per unit of risk. US Gold Corp is currently generating about 0.11 per unit of volatility. If you would invest  589.00  in US Gold Corp on September 14, 2024 and sell it today you would earn a total of  143.00  from holding US Gold Corp or generate 24.28% return on investment over 90 days.

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

Irving Resources  vs.  US Gold Corp

Irving Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Irving Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

US Gold Corp

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Irving Resources and US Gold

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

The idea behind Irving Resources and US 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.