Correlation Between IG Group and Albion Technology
Can any of the company-specific risk be diversified away by investing in both IG Group and Albion Technology 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 IG Group and Albion Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IG Group Holdings and Albion Technology General, you can compare the effects of market volatilities on IG Group and Albion Technology 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 IG Group with a short position of Albion Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IG Group and Albion Technology.
Diversification Opportunities for IG Group and Albion Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IGG and Albion is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding IG Group Holdings and Albion Technology General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Technology General and IG Group 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 IG Group Holdings are associated (or correlated) with Albion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Technology General has no effect on the direction of IG Group i.e., IG Group and Albion Technology go up and down completely randomly.
Pair Corralation between IG Group and Albion Technology
Assuming the 90 days trading horizon IG Group Holdings is expected to generate 1.35 times more return on investment than Albion Technology. However, IG Group is 1.35 times more volatile than Albion Technology General. It trades about 0.02 of its potential returns per unit of risk. Albion Technology General is currently generating about -0.01 per unit of risk. If you would invest 92,575 in IG Group Holdings on November 28, 2024 and sell it today you would earn a total of 1,775 from holding IG Group Holdings or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IG Group Holdings vs. Albion Technology General
Performance |
| Timeline |
| IG Group Holdings |
| Albion Technology General |
IG Group and Albion Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IG Group and Albion Technology
The main advantage of trading using opposite IG Group and Albion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IG Group position performs unexpectedly, Albion Technology 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 Albion Technology will offset losses from the drop in Albion Technology's long position.| IG Group vs. LPKF Laser Electronics | IG Group vs. Samsung Electronics Co | IG Group vs. United Airlines Holdings | IG Group vs. STMicroelectronics NV |
| Albion Technology vs. Elmos Semiconductor SE | Albion Technology vs. AfriTin Mining | Albion Technology vs. METALL ZUG AG | Albion Technology vs. Geely Automobile Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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