Correlation Between Altura Mining and IGO
Can any of the company-specific risk be diversified away by investing in both Altura Mining and IGO 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 Altura Mining and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altura Mining Limited and IGO Limited, you can compare the effects of market volatilities on Altura Mining and IGO 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 Altura Mining with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altura Mining and IGO.
Diversification Opportunities for Altura Mining and IGO
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Altura and IGO is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Altura Mining Limited and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Altura 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 Altura Mining Limited are associated (or correlated) with IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Altura Mining i.e., Altura Mining and IGO go up and down completely randomly.
Pair Corralation between Altura Mining and IGO
Assuming the 90 days horizon Altura Mining Limited is expected to under-perform the IGO. In addition to that, Altura Mining is 7.82 times more volatile than IGO Limited. It trades about -0.19 of its total potential returns per unit of risk. IGO Limited is currently generating about -0.19 per unit of volatility. If you would invest 348.00 in IGO Limited on September 1, 2024 and sell it today you would lose (27.00) from holding IGO Limited or give up 7.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altura Mining Limited vs. IGO Limited
Performance |
| Timeline |
| Altura Mining Limited |
| IGO Limited |
Altura Mining and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altura Mining and IGO
The main advantage of trading using opposite Altura Mining and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altura Mining position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO's long position.| Altura Mining vs. ATT Inc | Altura Mining vs. Merck Company | Altura Mining vs. Walt Disney | Altura Mining vs. Caterpillar |
| IGO vs. Grid Metals Corp | IGO vs. First American Silver | IGO vs. Qubec Nickel Corp | IGO vs. Lithium Australia NL |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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