Correlation Between IGO and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both IGO and AMG Advanced 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 AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and AMG Advanced Metallurgical, you can compare the effects of market volatilities on IGO and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and AMG Advanced.
Diversification Opportunities for IGO and AMG Advanced
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IGO and AMG is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of IGO i.e., IGO and AMG Advanced go up and down completely randomly.
Pair Corralation between IGO and AMG Advanced
Assuming the 90 days horizon IGO Limited is expected to generate 1.28 times more return on investment than AMG Advanced. However, IGO is 1.28 times more volatile than AMG Advanced Metallurgical. It trades about 0.13 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.2 per unit of risk. If you would invest 609.00 in IGO Limited on September 12, 2024 and sell it today you would earn a total of 71.00 from holding IGO Limited or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGO Limited vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| IGO Limited |
| AMG Advanced Metallu |
IGO and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and AMG Advanced
The main advantage of trading using opposite IGO and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| AMG Advanced vs. Huntsman Exploration | AMG Advanced vs. Aurelia Metals Limited | AMG Advanced vs. Adriatic Metals PLC | AMG Advanced vs. American Helium |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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