Correlation Between IGO and Alpha Copper
Can any of the company-specific risk be diversified away by investing in both IGO and Alpha Copper 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 IGO and Alpha Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Alpha Copper Corp, you can compare the effects of market volatilities on IGO and Alpha Copper 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 IGO with a short position of Alpha Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Alpha Copper.
Diversification Opportunities for IGO and Alpha Copper
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IGO and Alpha is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Alpha Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Copper Corp and IGO 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 IGO Limited are associated (or correlated) with Alpha Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Copper Corp has no effect on the direction of IGO i.e., IGO and Alpha Copper go up and down completely randomly.
Pair Corralation between IGO and Alpha Copper
Assuming the 90 days horizon IGO Limited is expected to under-perform the Alpha Copper. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 3.15 times less risky than Alpha Copper. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Alpha Copper Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 87.00 in Alpha Copper Corp on September 12, 2024 and sell it today you would lose (76.00) from holding Alpha Copper Corp or give up 87.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
IGO Limited vs. Alpha Copper Corp
Performance |
| Timeline |
| IGO Limited |
| Alpha Copper Corp |
IGO and Alpha Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Alpha Copper
The main advantage of trading using opposite IGO and Alpha Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Alpha Copper 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 Alpha Copper will offset losses from the drop in Alpha Copper's long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Alpha Copper vs. Qubec Nickel Corp | Alpha Copper vs. IGO Limited | Alpha Copper vs. Focus Graphite | Alpha Copper vs. Mineral Res |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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