Correlation Between IGO and A-Cap Energy
Can any of the company-specific risk be diversified away by investing in both IGO and A-Cap Energy 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 A-Cap Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and A Cap Energy Limited, you can compare the effects of market volatilities on IGO and A-Cap Energy 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 A-Cap Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and A-Cap Energy.
Diversification Opportunities for IGO and A-Cap Energy
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IGO and A-Cap is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and A Cap Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Cap Energy 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 A-Cap Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Cap Energy has no effect on the direction of IGO i.e., IGO and A-Cap Energy go up and down completely randomly.
Pair Corralation between IGO and A-Cap Energy
Assuming the 90 days horizon IGO Limited is expected to under-perform the A-Cap Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 7.11 times less risky than A-Cap Energy. The pink sheet trades about -0.04 of its potential returns per unit of risk. The A Cap Energy Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.00 in A Cap Energy Limited on September 3, 2024 and sell it today you would lose (3.40) from holding A Cap Energy Limited or give up 56.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 27.73% |
| Values | Daily Returns |
IGO Limited vs. A Cap Energy Limited
Performance |
| Timeline |
| IGO Limited |
| A Cap Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IGO and A-Cap Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and A-Cap Energy
The main advantage of trading using opposite IGO and A-Cap Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, A-Cap Energy 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 A-Cap Energy will offset losses from the drop in A-Cap Energy's long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| A-Cap Energy vs. Champion Bear Resources | A-Cap Energy vs. Aurelia Metals Limited | A-Cap Energy vs. Baroyeca Gold Silver | A-Cap Energy vs. Centaurus Metals Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |