Correlation Between Hycroft Mining and IAMGold

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

By analyzing existing cross correlation between Hycroft Mining Holding and IAMGold, you can compare the effects of market volatilities on Hycroft Mining and IAMGold 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 Hycroft Mining with a short position of IAMGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and IAMGold.

Diversification Opportunities for Hycroft Mining and IAMGold

0.07

Correlation Coefficient

Hycroft Mining  IAMGold

Significant diversification

The 3 months correlation between Hycroft and IAMGold is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and IAMGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAMGold and Hycroft Mining 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 Hycroft Mining Holding are associated (or correlated) with IAMGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAMGold has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and IAMGold go up and down completely randomly.

Pair Corralation between Hycroft Mining and IAMGold

Assuming the 90 days horizon Hycroft Mining Holding is expected to under-perform the IAMGold. In addition to that, Hycroft Mining is 2.08 times more volatile than IAMGold. It trades about -0.05 of its total potential returns per unit of risk. IAMGold is currently generating about 0.18 per unit of volatility. If you would invest  455.00  in IAMGold on August 10, 2024 and sell it today you would earn a total of  77.00  from holding IAMGold or generate 16.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	86.36%
Values	Daily Returns

Hycroft Mining Holding  vs.  IAMGold

Hycroft Mining Holding

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hycroft Mining Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Hycroft Mining may actually be approaching a critical reversion point that can send shares even higher in December 2024.

IAMGold

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IAMGold are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, IAMGold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hycroft Mining and IAMGold

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

The idea behind Hycroft Mining Holding and IAMGold 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.