Correlation Between IGO and Battery Minerals
Can any of the company-specific risk be diversified away by investing in both IGO and Battery Minerals 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 Battery Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Battery Minerals Limited, you can compare the effects of market volatilities on IGO and Battery Minerals 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 Battery Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Battery Minerals.
Diversification Opportunities for IGO and Battery Minerals
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IGO and Battery is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Battery Minerals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battery Minerals 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 Battery Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battery Minerals has no effect on the direction of IGO i.e., IGO and Battery Minerals go up and down completely randomly.
Pair Corralation between IGO and Battery Minerals
Assuming the 90 days horizon IGO Limited is expected to under-perform the Battery Minerals. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 5.04 times less risky than Battery Minerals. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Battery Minerals Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Battery Minerals Limited on September 4, 2024 and sell it today you would earn a total of 3.00 from holding Battery Minerals Limited or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
IGO Limited vs. Battery Minerals Limited
Performance |
| Timeline |
| IGO Limited |
| Battery Minerals |
IGO and Battery Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Battery Minerals
The main advantage of trading using opposite IGO and Battery Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Battery Minerals 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 Battery Minerals will offset losses from the drop in Battery Minerals' long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Battery Minerals vs. Global Battery Metals | Battery Minerals vs. Stallion Discoveries Corp | Battery Minerals vs. Vanadiumcorp Resource | Battery Minerals vs. Surge Copper Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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