Correlation Between Grupo México and IGO
Can any of the company-specific risk be diversified away by investing in both Grupo México 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 Grupo México and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Mxico SAB and IGO Limited, you can compare the effects of market volatilities on Grupo México 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 Grupo México with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo México and IGO.
Diversification Opportunities for Grupo México and IGO
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and IGO is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Mxico SAB and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Grupo México 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 Grupo Mxico SAB 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 Grupo México i.e., Grupo México and IGO go up and down completely randomly.
Pair Corralation between Grupo México and IGO
Assuming the 90 days horizon Grupo Mxico SAB is expected to under-perform the IGO. In addition to that, Grupo México is 3.85 times more volatile than IGO Limited. It trades about -0.27 of its total potential returns per unit of risk. IGO Limited is currently generating about -0.21 per unit of volatility. If you would invest 695.00 in IGO Limited on August 30, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Mxico SAB vs. IGO Limited
Performance |
| Timeline |
| Grupo Mxico SAB |
| IGO Limited |
Grupo México and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo México and IGO
The main advantage of trading using opposite Grupo México and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo México 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.| Grupo México vs. Pilbara Minerals Limited | Grupo México vs. South32 Limited | Grupo México vs. Critical Elements | Grupo México vs. TVI Pacific |
| IGO vs. Rockridge Resources | IGO vs. Ameriwest Lithium | IGO vs. Osisko Metals Incorporated | IGO vs. Volt Lithium 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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