Correlation Between IGO and Niobay Metals
Can any of the company-specific risk be diversified away by investing in both IGO and Niobay 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 Niobay 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 Niobay Metals, you can compare the effects of market volatilities on IGO and Niobay 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 Niobay Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Niobay Metals.
Diversification Opportunities for IGO and Niobay Metals
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IGO and Niobay is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Niobay Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niobay 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 Niobay Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niobay Metals has no effect on the direction of IGO i.e., IGO and Niobay Metals go up and down completely randomly.
Pair Corralation between IGO and Niobay Metals
Assuming the 90 days horizon IGO Limited is expected to under-perform the Niobay Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 3.49 times less risky than Niobay Metals. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Niobay Metals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Niobay Metals on September 12, 2024 and sell it today you would lose (8.00) from holding Niobay Metals or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGO Limited vs. Niobay Metals
Performance |
| Timeline |
| IGO Limited |
| Niobay Metals |
IGO and Niobay Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Niobay Metals
The main advantage of trading using opposite IGO and Niobay Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Niobay 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 Niobay Metals will offset losses from the drop in Niobay Metals' long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Niobay Metals vs. Murchison Minerals | Niobay Metals vs. Mundoro Capital | Niobay Metals vs. E79 Resources Corp | Niobay 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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