Correlation Between Huntsman Exploration and IGO
Can any of the company-specific risk be diversified away by investing in both Huntsman Exploration 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 Huntsman Exploration and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman Exploration and IGO Limited, you can compare the effects of market volatilities on Huntsman Exploration 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 Huntsman Exploration with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman Exploration and IGO.
Diversification Opportunities for Huntsman Exploration and IGO
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Huntsman and IGO is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Huntsman Exploration 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 Huntsman Exploration 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 Huntsman Exploration i.e., Huntsman Exploration and IGO go up and down completely randomly.
Pair Corralation between Huntsman Exploration and IGO
Assuming the 90 days horizon Huntsman Exploration is expected to under-perform the IGO. In addition to that, Huntsman Exploration is 28.38 times more volatile than IGO Limited. It trades about -0.22 of its total potential returns per unit of risk. IGO Limited is currently generating about -0.22 per unit of volatility. If you would invest 695.00 in IGO Limited on September 3, 2024 and sell it today you would lose (15.00) from holding IGO Limited or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Huntsman Exploration vs. IGO Limited
Performance |
| Timeline |
| Huntsman Exploration |
| IGO Limited |
Huntsman Exploration and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman Exploration and IGO
The main advantage of trading using opposite Huntsman Exploration and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration 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.| Huntsman Exploration vs. Aurelia Metals Limited | Huntsman Exploration vs. Adriatic Metals PLC | Huntsman Exploration vs. American Helium | Huntsman Exploration vs. Progressive Planet Solutions |
| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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