Correlation Between IGO and TD Holdings
Can any of the company-specific risk be diversified away by investing in both IGO and TD Holdings 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 TD Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and TD Holdings, you can compare the effects of market volatilities on IGO and TD Holdings 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 TD Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and TD Holdings.
Diversification Opportunities for IGO and TD Holdings
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IGO and GLG is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and TD Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Holdings 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 TD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Holdings has no effect on the direction of IGO i.e., IGO and TD Holdings go up and down completely randomly.
Pair Corralation between IGO and TD Holdings
Assuming the 90 days horizon IGO Limited is expected to generate 0.76 times more return on investment than TD Holdings. However, IGO Limited is 1.32 times less risky than TD Holdings. It trades about -0.05 of its potential returns per unit of risk. TD Holdings is currently generating about -0.14 per unit of risk. If you would invest 1,702 in IGO Limited on August 31, 2024 and sell it today you would lose (1,022) from holding IGO Limited or give up 60.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.58% |
| Values | Daily Returns |
IGO Limited vs. TD Holdings
Performance |
| Timeline |
| IGO Limited |
| TD Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
IGO and TD Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and TD Holdings
The main advantage of trading using opposite IGO and TD Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, TD Holdings 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 TD Holdings will offset losses from the drop in TD Holdings' long position.The idea behind IGO Limited and TD Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TD Holdings vs. Vizsla Resources Corp | TD Holdings vs. Western Copper and | TD Holdings vs. Americas Silver Corp | TD Holdings vs. EMX Royalty 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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