Correlation Between IGO and Commander Resources
Can any of the company-specific risk be diversified away by investing in both IGO and Commander 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 Commander 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 Commander Resources, you can compare the effects of market volatilities on IGO and Commander 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 Commander Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Commander Resources.
Diversification Opportunities for IGO and Commander Resources
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IGO and Commander is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Commander Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commander 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 Commander Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commander Resources has no effect on the direction of IGO i.e., IGO and Commander Resources go up and down completely randomly.
Pair Corralation between IGO and Commander Resources
Assuming the 90 days horizon IGO Limited is expected to generate 0.58 times more return on investment than Commander Resources. However, IGO Limited is 1.73 times less risky than Commander Resources. It trades about -0.04 of its potential returns per unit of risk. Commander Resources is currently generating about -0.02 per unit of risk. If you would invest 1,068 in IGO Limited on September 12, 2024 and sell it today you would lose (388.00) from holding IGO Limited or give up 36.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
IGO Limited vs. Commander Resources
Performance |
| Timeline |
| IGO Limited |
| Commander Resources |
IGO and Commander Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Commander Resources
The main advantage of trading using opposite IGO and Commander Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Commander 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 Commander Resources will offset losses from the drop in Commander Resources' long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Commander Resources vs. Qubec Nickel Corp | Commander Resources vs. IGO Limited | Commander Resources vs. Focus Graphite | Commander Resources vs. Mineral Res |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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