Correlation Between IGO and Winsome Resources
Can any of the company-specific risk be diversified away by investing in both IGO and Winsome 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 Winsome 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 Winsome Resources Limited, you can compare the effects of market volatilities on IGO and Winsome 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 Winsome Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Winsome Resources.
Diversification Opportunities for IGO and Winsome Resources
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IGO and Winsome is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Winsome Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winsome 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 Winsome Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winsome Resources has no effect on the direction of IGO i.e., IGO and Winsome Resources go up and down completely randomly.
Pair Corralation between IGO and Winsome Resources
Assuming the 90 days horizon IGO is expected to generate 72.48 times less return on investment than Winsome Resources. But when comparing it to its historical volatility, IGO Limited is 1.07 times less risky than Winsome Resources. It trades about 0.0 of its potential returns per unit of risk. Winsome Resources Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Winsome Resources Limited on November 5, 2024 and sell it today you would earn a total of 1.00 from holding Winsome Resources Limited or generate 3.33% 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. Winsome Resources Limited
Performance |
| Timeline |
| IGO Limited |
| Winsome Resources |
IGO and Winsome Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGO and Winsome Resources
The main advantage of trading using opposite IGO and Winsome Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Winsome 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 Winsome Resources will offset losses from the drop in Winsome Resources' 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 Stocks Directory module to find actively traded stocks across global markets.
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