Correlation Between IGO and Aclara Resources
Can any of the company-specific risk be diversified away by investing in both IGO and Aclara Resources 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 Aclara Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Aclara Resources, you can compare the effects of market volatilities on IGO and Aclara Resources 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 Aclara Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Aclara Resources.
Diversification Opportunities for IGO and Aclara Resources
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IGO and Aclara is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Aclara Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclara Resources 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 Aclara Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclara Resources has no effect on the direction of IGO i.e., IGO and Aclara Resources go up and down completely randomly.
Pair Corralation between IGO and Aclara Resources
Assuming the 90 days horizon IGO Limited is expected to under-perform the Aclara Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 1.6 times less risky than Aclara Resources. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Aclara Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Aclara Resources on September 4, 2024 and sell it today you would earn a total of 11.00 from holding Aclara Resources or generate 55.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
IGO Limited vs. Aclara Resources
Performance |
| Timeline |
| IGO Limited |
| Aclara Resources |
IGO and Aclara Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Aclara Resources
The main advantage of trading using opposite IGO and Aclara Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Aclara Resources 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 Aclara Resources will offset losses from the drop in Aclara Resources' long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Aclara Resources vs. Edison Cobalt Corp | Aclara Resources vs. Champion Bear Resources | Aclara Resources vs. Avarone Metals | Aclara Resources vs. Adriatic Metals PLC |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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