Correlation Between Giyani Metals and IGO
Can any of the company-specific risk be diversified away by investing in both Giyani Metals 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 Giyani Metals and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giyani Metals Corp and IGO Limited, you can compare the effects of market volatilities on Giyani Metals 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 Giyani Metals with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giyani Metals and IGO.
Diversification Opportunities for Giyani Metals and IGO
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Giyani and IGO is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Giyani Metals Corp and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Giyani Metals 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 Giyani Metals Corp 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 Giyani Metals i.e., Giyani Metals and IGO go up and down completely randomly.
Pair Corralation between Giyani Metals and IGO
Assuming the 90 days horizon Giyani Metals Corp is expected to generate 1.44 times more return on investment than IGO. However, Giyani Metals is 1.44 times more volatile than IGO Limited. It trades about 0.04 of its potential returns per unit of risk. IGO Limited is currently generating about -0.02 per unit of risk. If you would invest 7.00 in Giyani Metals Corp on September 1, 2024 and sell it today you would earn a total of 0.15 from holding Giyani Metals Corp or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Giyani Metals Corp vs. IGO Limited
Performance |
| Timeline |
| Giyani Metals Corp |
| IGO Limited |
Giyani Metals and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giyani Metals and IGO
The main advantage of trading using opposite Giyani Metals and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giyani Metals 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.| Giyani Metals vs. South32 Limited | Giyani Metals vs. NioCorp Developments Ltd | Giyani Metals vs. HUMANA INC | Giyani Metals vs. SCOR PK |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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