Correlation Between IGO and Québec Nickel
Can any of the company-specific risk be diversified away by investing in both IGO and Québec Nickel 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 Québec Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Qubec Nickel Corp, you can compare the effects of market volatilities on IGO and Québec Nickel 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 Québec Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Québec Nickel.
Diversification Opportunities for IGO and Québec Nickel
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IGO and Québec is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp 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 Québec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of IGO i.e., IGO and Québec Nickel go up and down completely randomly.
Pair Corralation between IGO and Québec Nickel
Assuming the 90 days horizon IGO Limited is expected to under-perform the Québec Nickel. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 4.27 times less risky than Québec Nickel. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Qubec Nickel Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 130.00 in Qubec Nickel Corp on August 29, 2024 and sell it today you would lose (128.25) from holding Qubec Nickel Corp or give up 98.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGO Limited vs. Qubec Nickel Corp
Performance |
| Timeline |
| IGO Limited |
| Qubec Nickel Corp |
IGO and Québec Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Québec Nickel
The main advantage of trading using opposite IGO and Québec Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Québec Nickel 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 Québec Nickel will offset losses from the drop in Québec Nickel's long position.| IGO vs. Rockridge Resources | IGO vs. Ameriwest Lithium | IGO vs. Osisko Metals Incorporated | IGO vs. Volt Lithium Corp |
| Québec Nickel vs. Norra Metals Corp | Québec Nickel vs. E79 Resources Corp | Québec Nickel vs. Voltage Metals Corp | Québec Nickel vs. Cantex Mine Development |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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