Correlation Between IGO and Northern Lion
Can any of the company-specific risk be diversified away by investing in both IGO and Northern Lion 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 Northern Lion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Northern Lion Gold, you can compare the effects of market volatilities on IGO and Northern Lion 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 Northern Lion. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Northern Lion.
Diversification Opportunities for IGO and Northern Lion
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IGO and Northern is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Northern Lion Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Lion Gold 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 Northern Lion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Lion Gold has no effect on the direction of IGO i.e., IGO and Northern Lion go up and down completely randomly.
Pair Corralation between IGO and Northern Lion
Assuming the 90 days horizon IGO Limited is expected to under-perform the Northern Lion. In addition to that, IGO is 1.94 times more volatile than Northern Lion Gold. It trades about -0.03 of its total potential returns per unit of risk. Northern Lion Gold is currently generating about -0.04 per unit of volatility. If you would invest 16.00 in Northern Lion Gold on September 13, 2024 and sell it today you would lose (6.00) from holding Northern Lion Gold or give up 37.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
IGO Limited vs. Northern Lion Gold
Performance |
| Timeline |
| IGO Limited |
| Northern Lion Gold |
IGO and Northern Lion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Northern Lion
The main advantage of trading using opposite IGO and Northern Lion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Northern Lion 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 Northern Lion will offset losses from the drop in Northern Lion's long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Northern Lion vs. Boston Beer | Northern Lion vs. Sealed Air | Northern Lion vs. Park Electrochemical | Northern Lion vs. Westrock Coffee |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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