Correlation Between IGO and EMX Royalty
Can any of the company-specific risk be diversified away by investing in both IGO and EMX Royalty 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 EMX Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and EMX Royalty Corp, you can compare the effects of market volatilities on IGO and EMX Royalty 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 EMX Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and EMX Royalty.
Diversification Opportunities for IGO and EMX Royalty
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IGO and EMX is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and EMX Royalty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMX Royalty 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 EMX Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMX Royalty Corp has no effect on the direction of IGO i.e., IGO and EMX Royalty go up and down completely randomly.
Pair Corralation between IGO and EMX Royalty
Assuming the 90 days horizon IGO Limited is expected to under-perform the EMX Royalty. In addition to that, IGO is 2.04 times more volatile than EMX Royalty Corp. It trades about -0.14 of its total potential returns per unit of risk. EMX Royalty Corp is currently generating about 0.08 per unit of volatility. If you would invest 170.00 in EMX Royalty Corp on November 29, 2024 and sell it today you would earn a total of 5.00 from holding EMX Royalty Corp or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
IGO Limited vs. EMX Royalty Corp
Performance |
| Timeline |
| IGO Limited |
| EMX Royalty Corp |
IGO and EMX Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and EMX Royalty
The main advantage of trading using opposite IGO and EMX Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, EMX Royalty 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 EMX Royalty will offset losses from the drop in EMX Royalty's long position.| IGO vs. Grid Metals Corp | IGO vs. First American Silver | IGO vs. Qubec Nickel Corp | IGO vs. Lithium Australia NL |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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