Correlation Between Edison Cobalt and IGO
Can any of the company-specific risk be diversified away by investing in both Edison Cobalt 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 Edison Cobalt and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edison Cobalt Corp and IGO Limited, you can compare the effects of market volatilities on Edison Cobalt 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 Edison Cobalt with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edison Cobalt and IGO.
Diversification Opportunities for Edison Cobalt and IGO
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Edison and IGO is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Edison Cobalt Corp and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Edison Cobalt 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 Edison Cobalt 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 Edison Cobalt i.e., Edison Cobalt and IGO go up and down completely randomly.
Pair Corralation between Edison Cobalt and IGO
Assuming the 90 days horizon Edison Cobalt Corp is expected to under-perform the IGO. In addition to that, Edison Cobalt is 3.41 times more volatile than IGO Limited. It trades about -0.16 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 | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Edison Cobalt Corp vs. IGO Limited
Performance |
| Timeline |
| Edison Cobalt Corp |
| IGO Limited |
Edison Cobalt and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edison Cobalt and IGO
The main advantage of trading using opposite Edison Cobalt and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edison Cobalt 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.| Edison Cobalt vs. ATT Inc | Edison Cobalt vs. Merck Company | Edison Cobalt vs. Walt Disney | Edison Cobalt 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |