Correlation Between IGO and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both IGO and Nexa Resources 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 Nexa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Nexa Resources SA, you can compare the effects of market volatilities on IGO and Nexa Resources 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 Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Nexa Resources.
Diversification Opportunities for IGO and Nexa Resources
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IGO and Nexa is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA 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 Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of IGO i.e., IGO and Nexa Resources go up and down completely randomly.
Pair Corralation between IGO and Nexa Resources
Assuming the 90 days horizon IGO Limited is expected to under-perform the Nexa Resources. In addition to that, IGO is 1.6 times more volatile than Nexa Resources SA. It trades about -0.25 of its total potential returns per unit of risk. Nexa Resources SA is currently generating about 0.35 per unit of volatility. If you would invest 523.00 in Nexa Resources SA on January 8, 2025 and sell it today you would earn a total of 69.00 from holding Nexa Resources SA or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
IGO Limited vs. Nexa Resources SA
Performance |
| Timeline |
| IGO Limited |
| Nexa Resources SA |
IGO and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Nexa Resources
The main advantage of trading using opposite IGO and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Nexa Resources 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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