Correlation Between IGO and Baroyeca Gold
Can any of the company-specific risk be diversified away by investing in both IGO and Baroyeca Gold 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 Baroyeca Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Baroyeca Gold Silver, you can compare the effects of market volatilities on IGO and Baroyeca Gold 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 Baroyeca Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Baroyeca Gold.
Diversification Opportunities for IGO and Baroyeca Gold
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IGO and Baroyeca is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Baroyeca Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baroyeca Gold Silver 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 Baroyeca Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baroyeca Gold Silver has no effect on the direction of IGO i.e., IGO and Baroyeca Gold go up and down completely randomly.
Pair Corralation between IGO and Baroyeca Gold
Assuming the 90 days horizon IGO Limited is expected to under-perform the Baroyeca Gold. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 5.45 times less risky than Baroyeca Gold. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Baroyeca Gold Silver is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Baroyeca Gold Silver on September 3, 2024 and sell it today you would lose (3.58) from holding Baroyeca Gold Silver or give up 71.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGO Limited vs. Baroyeca Gold Silver
Performance |
| Timeline |
| IGO Limited |
| Baroyeca Gold Silver |
IGO and Baroyeca Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Baroyeca Gold
The main advantage of trading using opposite IGO and Baroyeca Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Baroyeca Gold 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 Baroyeca Gold will offset losses from the drop in Baroyeca Gold's long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Baroyeca Gold vs. Qubec Nickel Corp | Baroyeca Gold vs. IGO Limited | Baroyeca Gold vs. Avarone Metals | Baroyeca Gold 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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