Correlation Between IGO and Spearmint Resources
Can any of the company-specific risk be diversified away by investing in both IGO and Spearmint 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 Spearmint 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 Spearmint Resources, you can compare the effects of market volatilities on IGO and Spearmint 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 Spearmint Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Spearmint Resources.
Diversification Opportunities for IGO and Spearmint Resources
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between IGO and Spearmint is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Spearmint Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spearmint Resources 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 Spearmint Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spearmint Resources has no effect on the direction of IGO i.e., IGO and Spearmint Resources go up and down completely randomly.
Pair Corralation between IGO and Spearmint Resources
Assuming the 90 days horizon IGO Limited is expected to under-perform the Spearmint Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 4.26 times less risky than Spearmint Resources. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Spearmint Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Spearmint Resources on September 3, 2024 and sell it today you would lose (1.96) from holding Spearmint Resources or give up 56.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
IGO Limited vs. Spearmint Resources
Performance |
| Timeline |
| IGO Limited |
| Spearmint Resources |
IGO and Spearmint Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Spearmint Resources
The main advantage of trading using opposite IGO and Spearmint Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Spearmint 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 Spearmint Resources will offset losses from the drop in Spearmint Resources' long position.| IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
| Spearmint Resources vs. Qubec Nickel Corp | Spearmint Resources vs. IGO Limited | Spearmint Resources vs. Avarone Metals | Spearmint Resources vs. Adriatic Metals PLC |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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