Correlation Between Ironbark Capital and Mount Gibson
Can any of the company-specific risk be diversified away by investing in both Ironbark Capital and Mount Gibson 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 Ironbark Capital and Mount Gibson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ironbark Capital and Mount Gibson Iron, you can compare the effects of market volatilities on Ironbark Capital and Mount Gibson 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 Ironbark Capital with a short position of Mount Gibson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironbark Capital and Mount Gibson.
Diversification Opportunities for Ironbark Capital and Mount Gibson
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ironbark and Mount is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital and Mount Gibson Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mount Gibson Iron and Ironbark Capital 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 Ironbark Capital are associated (or correlated) with Mount Gibson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mount Gibson Iron has no effect on the direction of Ironbark Capital i.e., Ironbark Capital and Mount Gibson go up and down completely randomly.
Pair Corralation between Ironbark Capital and Mount Gibson
Assuming the 90 days trading horizon Ironbark Capital is expected to generate 7.5 times less return on investment than Mount Gibson. But when comparing it to its historical volatility, Ironbark Capital is 2.74 times less risky than Mount Gibson. It trades about 0.0 of its potential returns per unit of risk. Mount Gibson Iron is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Mount Gibson Iron on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Mount Gibson Iron or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ironbark Capital vs. Mount Gibson Iron
Performance |
| Timeline |
| Ironbark Capital |
| Mount Gibson Iron |
Ironbark Capital and Mount Gibson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ironbark Capital and Mount Gibson
The main advantage of trading using opposite Ironbark Capital and Mount Gibson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ironbark Capital position performs unexpectedly, Mount Gibson 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 Mount Gibson will offset losses from the drop in Mount Gibson's long position.| Ironbark Capital vs. Group 6 Metals | Ironbark Capital vs. Aurelia Metals | Ironbark Capital vs. Ramsay Health Care | Ironbark Capital vs. ACDC Metals |
| Mount Gibson vs. Clime Investment Management | Mount Gibson vs. Alternative Investment Trust | Mount Gibson vs. K2 Asset Management | Mount Gibson vs. Australian Unity Office |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |