Correlation Between Eskay Mining and IGO
Can any of the company-specific risk be diversified away by investing in both Eskay 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 Eskay Mining and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eskay Mining Corp and IGO Limited, you can compare the effects of market volatilities on Eskay 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 Eskay Mining with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eskay Mining and IGO.
Diversification Opportunities for Eskay Mining and IGO
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eskay and IGO is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Eskay Mining Corp and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Eskay 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 Eskay Mining 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 Eskay Mining i.e., Eskay Mining and IGO go up and down completely randomly.
Pair Corralation between Eskay Mining and IGO
Assuming the 90 days horizon Eskay Mining Corp is expected to under-perform the IGO. But the pink sheet apears to be less risky and, when comparing its historical volatility, Eskay Mining Corp is 1.1 times less risky than IGO. The pink sheet trades about -0.09 of its potential returns per unit of risk. The IGO Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 480.00 in IGO Limited on August 29, 2024 and sell it today you would lose (140.00) from holding IGO Limited or give up 29.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eskay Mining Corp vs. IGO Limited
Performance |
| Timeline |
| Eskay Mining Corp |
| IGO Limited |
Eskay Mining and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eskay Mining and IGO
The main advantage of trading using opposite Eskay Mining and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eskay 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.| Eskay Mining vs. Aftermath Silver | Eskay Mining vs. Group Ten Metals | Eskay Mining vs. Prime Mining Corp | Eskay Mining vs. Juggernaut Exploration |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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