Correlation Between IGO and Lomiko Metals
Can any of the company-specific risk be diversified away by investing in both IGO and Lomiko Metals 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 Lomiko Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Lomiko Metals, you can compare the effects of market volatilities on IGO and Lomiko Metals 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 Lomiko Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Lomiko Metals.
Diversification Opportunities for IGO and Lomiko Metals
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IGO and Lomiko is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Lomiko Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lomiko Metals 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 Lomiko Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lomiko Metals has no effect on the direction of IGO i.e., IGO and Lomiko Metals go up and down completely randomly.
Pair Corralation between IGO and Lomiko Metals
Assuming the 90 days horizon IGO Limited is expected to under-perform the Lomiko Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 49.45 times less risky than Lomiko Metals. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Lomiko Metals is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Lomiko Metals on August 31, 2024 and sell it today you would lose (10.00) from holding Lomiko Metals or give up 52.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGO Limited vs. Lomiko Metals
Performance |
| Timeline |
| IGO Limited |
| Lomiko Metals |
IGO and Lomiko Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Lomiko Metals
The main advantage of trading using opposite IGO and Lomiko Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Lomiko Metals 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 Lomiko Metals will offset losses from the drop in Lomiko Metals' long position.The idea behind IGO Limited and Lomiko Metals 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.| Lomiko Metals vs. ZincX Resources Corp | Lomiko Metals vs. Mundoro Capital | Lomiko Metals vs. Strategic Resources | Lomiko Metals vs. Norra Metals 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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