Correlation Between IGO and Commerce Resources
Can any of the company-specific risk be diversified away by investing in both IGO and Commerce 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 Commerce 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 Commerce Resources Corp, you can compare the effects of market volatilities on IGO and Commerce 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 Commerce Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Commerce Resources.
Diversification Opportunities for IGO and Commerce Resources
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IGO and Commerce is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Commerce Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce 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 Commerce Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Resources Corp has no effect on the direction of IGO i.e., IGO and Commerce Resources go up and down completely randomly.
Pair Corralation between IGO and Commerce Resources
Assuming the 90 days horizon IGO Limited is expected to under-perform the Commerce Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 1.26 times less risky than Commerce Resources. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Commerce Resources Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Commerce Resources Corp on September 1, 2024 and sell it today you would lose (5.10) from holding Commerce Resources Corp or give up 46.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGO Limited vs. Commerce Resources Corp
Performance |
| Timeline |
| IGO Limited |
| Commerce Resources Corp |
IGO and Commerce Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Commerce Resources
The main advantage of trading using opposite IGO and Commerce Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Commerce 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 Commerce Resources will offset losses from the drop in Commerce Resources' long position.| IGO vs. Grid Metals Corp | IGO vs. First American Silver | IGO vs. Qubec Nickel Corp | IGO vs. Lithium Australia NL |
| Commerce Resources vs. Great Western Minerals | Commerce Resources vs. StrikePoint Gold | Commerce Resources vs. Silver Elephant Mining | Commerce Resources vs. Eskay Mining 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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