Correlation Between IAMGold and Photronics
Can any of the company-specific risk be diversified away by investing in both IAMGold and Photronics 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 IAMGold and Photronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAMGold and Photronics, you can compare the effects of market volatilities on IAMGold and Photronics 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 IAMGold with a short position of Photronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAMGold and Photronics.
Diversification Opportunities for IAMGold and Photronics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IAMGold and Photronics is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding IAMGold and Photronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photronics and IAMGold 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 IAMGold are associated (or correlated) with Photronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photronics has no effect on the direction of IAMGold i.e., IAMGold and Photronics go up and down completely randomly.
Pair Corralation between IAMGold and Photronics
Considering the 90-day investment horizon IAMGold is expected to generate 1.53 times more return on investment than Photronics. However, IAMGold is 1.53 times more volatile than Photronics. It trades about 0.02 of its potential returns per unit of risk. Photronics is currently generating about -0.24 per unit of risk. If you would invest 1,367 in IAMGold on August 19, 2025 and sell it today you would earn a total of 2.00 from holding IAMGold or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAMGold vs. Photronics
Performance |
| Timeline |
| IAMGold |
| Photronics |
IAMGold and Photronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAMGold and Photronics
The main advantage of trading using opposite IAMGold and Photronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAMGold position performs unexpectedly, Photronics 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 Photronics will offset losses from the drop in Photronics' long position.The idea behind IAMGold and Photronics 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.| Photronics vs. Himax Technologies | Photronics vs. MaxLinear | Photronics vs. Ultra Clean Holdings | Photronics vs. nLIGHT Inc |
Check out your portfolio center.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.
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