Correlation Between IGO and Champion Bear
Can any of the company-specific risk be diversified away by investing in both IGO and Champion Bear 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 Champion Bear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Champion Bear Resources, you can compare the effects of market volatilities on IGO and Champion Bear 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 Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Champion Bear.
Diversification Opportunities for IGO and Champion Bear
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IGO and Champion is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear 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 Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of IGO i.e., IGO and Champion Bear go up and down completely randomly.
Pair Corralation between IGO and Champion Bear
Assuming the 90 days horizon IGO Limited is expected to under-perform the Champion Bear. In addition to that, IGO is 3.81 times more volatile than Champion Bear Resources. It trades about -0.24 of its total potential returns per unit of risk. Champion Bear Resources is currently generating about 0.21 per unit of volatility. If you would invest 2.00 in Champion Bear Resources on January 12, 2025 and sell it today you would earn a total of 0.10 from holding Champion Bear Resources or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGO Limited vs. Champion Bear Resources
Performance |
| Timeline |
| IGO Limited |
| Champion Bear Resources |
IGO and Champion Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Champion Bear
The main advantage of trading using opposite IGO and Champion Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Champion Bear 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 Champion Bear will offset losses from the drop in Champion Bear's long position.| IGO vs. Grid Metals Corp | IGO vs. First American Silver | IGO vs. Qubec Nickel Corp | IGO vs. Lithium Australia NL |
| Champion Bear vs. Aurelia Metals Limited | Champion Bear vs. Baroyeca Gold Silver | Champion Bear vs. Centaurus Metals Limited | Champion Bear vs. Edison Cobalt Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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