Correlation Between IGO and Elcora Advanced
Can any of the company-specific risk be diversified away by investing in both IGO and Elcora Advanced 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 Elcora Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Elcora Advanced Materials, you can compare the effects of market volatilities on IGO and Elcora Advanced 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 Elcora Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Elcora Advanced.
Diversification Opportunities for IGO and Elcora Advanced
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IGO and Elcora is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Elcora Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elcora Advanced Materials 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 Elcora Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elcora Advanced Materials has no effect on the direction of IGO i.e., IGO and Elcora Advanced go up and down completely randomly.
Pair Corralation between IGO and Elcora Advanced
Assuming the 90 days horizon IGO Limited is expected to under-perform the Elcora Advanced. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 32.87 times less risky than Elcora Advanced. The pink sheet trades about -0.22 of its potential returns per unit of risk. The Elcora Advanced Materials is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1.46 in Elcora Advanced Materials on September 3, 2024 and sell it today you would lose (0.26) from holding Elcora Advanced Materials or give up 17.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
IGO Limited vs. Elcora Advanced Materials
Performance |
| Timeline |
| IGO Limited |
| Elcora Advanced Materials |
IGO and Elcora Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Elcora Advanced
The main advantage of trading using opposite IGO and Elcora Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Elcora Advanced 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 Elcora Advanced will offset losses from the drop in Elcora Advanced's long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Elcora Advanced vs. Ceylon Graphite Corp | Elcora Advanced vs. Syrah Resources Limited | Elcora Advanced vs. Graphex Group Limited | Elcora Advanced vs. Lynas Rare Earths |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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