Correlation Between IGO and Lion Copper
Can any of the company-specific risk be diversified away by investing in both IGO and Lion Copper 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 Lion Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Lion Copper and, you can compare the effects of market volatilities on IGO and Lion Copper 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 Lion Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Lion Copper.
Diversification Opportunities for IGO and Lion Copper
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between IGO and Lion is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Lion Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Copper 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 Lion Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Copper has no effect on the direction of IGO i.e., IGO and Lion Copper go up and down completely randomly.
Pair Corralation between IGO and Lion Copper
Assuming the 90 days horizon IGO Limited is expected to under-perform the Lion Copper. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 2.41 times less risky than Lion Copper. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Lion Copper and is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Lion Copper and on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Lion Copper and or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
IGO Limited vs. Lion Copper and
Performance |
| Timeline |
| IGO Limited |
| Lion Copper |
IGO and Lion Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Lion Copper
The main advantage of trading using opposite IGO and Lion Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Lion Copper 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 Lion Copper will offset losses from the drop in Lion Copper's long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Lion Copper vs. Qubec Nickel Corp | Lion Copper vs. IGO Limited | Lion Copper vs. Avarone Metals | Lion Copper vs. Adriatic Metals PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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