Correlation Between Genetic Technologies and IGO
Can any of the company-specific risk be diversified away by investing in both Genetic Technologies 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 Genetic Technologies and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genetic Technologies and IGO, you can compare the effects of market volatilities on Genetic Technologies 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 Genetic Technologies with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genetic Technologies and IGO.
Diversification Opportunities for Genetic Technologies and IGO
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Genetic and IGO is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Genetic Technologies and IGO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO and Genetic Technologies 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 Genetic Technologies 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 has no effect on the direction of Genetic Technologies i.e., Genetic Technologies and IGO go up and down completely randomly.
Pair Corralation between Genetic Technologies and IGO
Assuming the 90 days trading horizon Genetic Technologies is expected to under-perform the IGO. In addition to that, Genetic Technologies is 1.42 times more volatile than IGO. It trades about -0.08 of its total potential returns per unit of risk. IGO is currently generating about -0.05 per unit of volatility. If you would invest 527.00 in IGO on August 25, 2024 and sell it today you would lose (32.00) from holding IGO or give up 6.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 57.78% |
| Values | Daily Returns |
Genetic Technologies vs. IGO
Performance |
| Timeline |
| Genetic Technologies |
| IGO |
Genetic Technologies and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genetic Technologies and IGO
The main advantage of trading using opposite Genetic Technologies and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genetic Technologies 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.| Genetic Technologies vs. Aneka Tambang Tbk | Genetic Technologies vs. National Australia Bank | Genetic Technologies vs. Commonwealth Bank of | Genetic Technologies vs. Commonwealth Bank of |
| IGO vs. Advanced Braking Technology | IGO vs. Bank of Queensland | IGO vs. Magellan Financial Group | IGO vs. Genetic Technologies |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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