Correlation Between IGO and Atico Mining
Can any of the company-specific risk be diversified away by investing in both IGO and Atico Mining 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 Atico Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Atico Mining, you can compare the effects of market volatilities on IGO and Atico Mining 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 Atico Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Atico Mining.
Diversification Opportunities for IGO and Atico Mining
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IGO and Atico is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Atico Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atico Mining 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 Atico Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atico Mining has no effect on the direction of IGO i.e., IGO and Atico Mining go up and down completely randomly.
Pair Corralation between IGO and Atico Mining
Assuming the 90 days horizon IGO Limited is expected to generate 1.09 times more return on investment than Atico Mining. However, IGO is 1.09 times more volatile than Atico Mining. It trades about 0.0 of its potential returns per unit of risk. Atico Mining is currently generating about -0.04 per unit of risk. If you would invest 412.00 in IGO Limited on September 3, 2024 and sell it today you would lose (91.00) from holding IGO Limited or give up 22.09% 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. Atico Mining
Performance |
| Timeline |
| IGO Limited |
| Atico Mining |
IGO and Atico Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Atico Mining
The main advantage of trading using opposite IGO and Atico Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Atico Mining 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 Atico Mining will offset losses from the drop in Atico Mining's long position.| IGO vs. Grid Metals Corp | IGO vs. First American Silver | IGO vs. Qubec Nickel Corp | IGO vs. Lithium Australia NL |
| Atico Mining vs. Edison Cobalt Corp | Atico Mining vs. Champion Bear Resources | Atico Mining vs. Avarone Metals | Atico Mining 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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