Correlation Between IGO and Spey Resources
Can any of the company-specific risk be diversified away by investing in both IGO and Spey 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 Spey 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 Spey Resources Corp, you can compare the effects of market volatilities on IGO and Spey 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 Spey Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Spey Resources.
Diversification Opportunities for IGO and Spey Resources
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IGO and Spey is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Spey Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spey Resources 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 Spey Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spey Resources Corp has no effect on the direction of IGO i.e., IGO and Spey Resources go up and down completely randomly.
Pair Corralation between IGO and Spey Resources
Assuming the 90 days horizon IGO Limited is expected to under-perform the Spey Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 10.73 times less risky than Spey Resources. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Spey Resources Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Spey Resources Corp on September 4, 2024 and sell it today you would lose (15.00) from holding Spey Resources Corp or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
IGO Limited vs. Spey Resources Corp
Performance |
| Timeline |
| IGO Limited |
| Spey Resources Corp |
IGO and Spey Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Spey Resources
The main advantage of trading using opposite IGO and Spey Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Spey 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 Spey Resources will offset losses from the drop in Spey Resources' long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Spey Resources vs. Grid Metals Corp | Spey Resources vs. POWR Lithium Corp | Spey Resources vs. First American Silver | Spey Resources vs. IGO Limited |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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