Correlation Between IAMGold and AngloGold Ashanti

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

By analyzing existing cross correlation between IAMGold and AngloGold Ashanti plc, you can compare the effects of market volatilities on IAMGold and AngloGold Ashanti 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 AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAMGold and AngloGold Ashanti.

Diversification Opportunities for IAMGold and AngloGold Ashanti

0.66

Correlation Coefficient

IAMGold  AngloGold Ashanti

Poor diversification

The 3 months correlation between IAMGold and AngloGold is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding IAMGold and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc 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 AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of IAMGold i.e., IAMGold and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between IAMGold and AngloGold Ashanti

Considering the 90-day investment horizon IAMGold is expected to generate 13.92 times less return on investment than AngloGold Ashanti. But when comparing it to its historical volatility, IAMGold is 1.07 times less risky than AngloGold Ashanti. It trades about 0.01 of its potential returns per unit of risk. AngloGold Ashanti plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,394  in AngloGold Ashanti plc on May 6, 2025 and sell it today you would earn a total of  923.00  from holding AngloGold Ashanti plc or generate 21.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

IAMGold  vs.  AngloGold Ashanti plc

IAMGold

Risk-Adjusted Performance

Very Weak

Over the last 90 days IAMGold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IAMGold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

AngloGold Ashanti plc

Risk-Adjusted Performance

OK

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

Pair Trading with IAMGold and AngloGold Ashanti

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

The idea behind IAMGold and AngloGold Ashanti plc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.