Correlation Between IAMGold and Vanguard California
Can any of the company-specific risk be diversified away by investing in both IAMGold and Vanguard California 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 Vanguard California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAMGold and Vanguard California Intermediate Term, you can compare the effects of market volatilities on IAMGold and Vanguard California 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 Vanguard California. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAMGold and Vanguard California.
Diversification Opportunities for IAMGold and Vanguard California
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IAMGold and Vanguard is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding IAMGold and Vanguard California Intermedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard California 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 Vanguard California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard California has no effect on the direction of IAMGold i.e., IAMGold and Vanguard California go up and down completely randomly.
Pair Corralation between IAMGold and Vanguard California
Considering the 90-day investment horizon IAMGold is expected to generate 29.03 times more return on investment than Vanguard California. However, IAMGold is 29.03 times more volatile than Vanguard California Intermediate Term. It trades about 0.25 of its potential returns per unit of risk. Vanguard California Intermediate Term is currently generating about 0.42 per unit of risk. If you would invest 800.00 in IAMGold on August 14, 2025 and sell it today you would earn a total of 530.00 from holding IAMGold or generate 66.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAMGold vs. Vanguard California Intermedia
Performance |
| Timeline |
| IAMGold |
| Vanguard California |
IAMGold and Vanguard California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAMGold and Vanguard California
The main advantage of trading using opposite IAMGold and Vanguard California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAMGold position performs unexpectedly, Vanguard California 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 Vanguard California will offset losses from the drop in Vanguard California's long position.The idea behind IAMGold and Vanguard California Intermediate Term 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.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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