Correlation Between IGO and Aurelia Metals
Can any of the company-specific risk be diversified away by investing in both IGO and Aurelia Metals 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 Aurelia Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Aurelia Metals Limited, you can compare the effects of market volatilities on IGO and Aurelia Metals 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 Aurelia Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Aurelia Metals.
Diversification Opportunities for IGO and Aurelia Metals
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IGO and Aurelia is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Aurelia Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals 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 Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of IGO i.e., IGO and Aurelia Metals go up and down completely randomly.
Pair Corralation between IGO and Aurelia Metals
Assuming the 90 days horizon IGO Limited is expected to under-perform the Aurelia Metals. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 1.81 times less risky than Aurelia Metals. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Aurelia Metals Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Aurelia Metals Limited on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Aurelia Metals Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
IGO Limited vs. Aurelia Metals Limited
Performance |
| Timeline |
| IGO Limited |
| Aurelia Metals |
IGO and Aurelia Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Aurelia Metals
The main advantage of trading using opposite IGO and Aurelia Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Aurelia Metals 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 Aurelia Metals will offset losses from the drop in Aurelia Metals' long position.| IGO vs. Grid Metals Corp | IGO vs. First American Silver | IGO vs. Qubec Nickel Corp | IGO vs. Lithium Australia NL |
| Aurelia Metals vs. Qubec Nickel Corp | Aurelia Metals vs. IGO Limited | Aurelia Metals vs. Avarone Metals | Aurelia Metals 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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