Correlation Between IAMGold and Valhi
Can any of the company-specific risk be diversified away by investing in both IAMGold and Valhi 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 Valhi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAMGold and Valhi Inc, you can compare the effects of market volatilities on IAMGold and Valhi 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 Valhi. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAMGold and Valhi.
Diversification Opportunities for IAMGold and Valhi
Very good diversification
The 3 months correlation between IAMGold and Valhi is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding IAMGold and Valhi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valhi Inc 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 Valhi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valhi Inc has no effect on the direction of IAMGold i.e., IAMGold and Valhi go up and down completely randomly.
Pair Corralation between IAMGold and Valhi
Considering the 90-day investment horizon IAMGold is expected to generate 0.98 times more return on investment than Valhi. However, IAMGold is 1.03 times less risky than Valhi. It trades about 0.08 of its potential returns per unit of risk. Valhi Inc is currently generating about 0.02 per unit of risk. If you would invest 267.00 in IAMGold on March 9, 2025 and sell it today you would earn a total of 477.00 from holding IAMGold or generate 178.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IAMGold vs. Valhi Inc
Performance |
| Timeline |
| IAMGold |
| Valhi Inc |
IAMGold and Valhi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAMGold and Valhi
The main advantage of trading using opposite IAMGold and Valhi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAMGold position performs unexpectedly, Valhi 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 Valhi will offset losses from the drop in Valhi's long position.| IAMGold vs. Eldorado Gold Corp | IAMGold vs. Coeur Mining | IAMGold vs. Gold Resource | IAMGold vs. Alamos Gold |
| Valhi vs. Huntsman | Valhi vs. Lsb Industries | Valhi vs. Westlake Chemical Partners | Valhi vs. Green Plains Renewable |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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