Correlation Between IGO and Globex Mining
Can any of the company-specific risk be diversified away by investing in both IGO and Globex Mining 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 Globex Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Globex Mining Enterprises, you can compare the effects of market volatilities on IGO and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Globex Mining.
Diversification Opportunities for IGO and Globex Mining
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IGO and Globex is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of IGO i.e., IGO and Globex Mining go up and down completely randomly.
Pair Corralation between IGO and Globex Mining
Assuming the 90 days horizon IGO Limited is expected to under-perform the Globex Mining. In addition to that, IGO is 1.79 times more volatile than Globex Mining Enterprises. It trades about -0.07 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.03 per unit of volatility. If you would invest 73.00 in Globex Mining Enterprises on September 3, 2024 and sell it today you would earn a total of 4.00 from holding Globex Mining Enterprises or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
IGO Limited vs. Globex Mining Enterprises
Performance |
| Timeline |
| IGO Limited |
| Globex Mining Enterprises |
IGO and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Globex Mining
The main advantage of trading using opposite IGO and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Globex Mining vs. Advantage Solutions | Globex Mining vs. Atlas Corp | Globex Mining vs. PureCycle Technologies | Globex Mining vs. WM Technology |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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