Correlation Between Lotus Resources and IGO
Can any of the company-specific risk be diversified away by investing in both Lotus Resources and IGO 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 Lotus Resources and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotus Resources Limited and IGO Limited, you can compare the effects of market volatilities on Lotus Resources and IGO 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 Lotus Resources with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotus Resources and IGO.
Diversification Opportunities for Lotus Resources and IGO
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lotus and IGO is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Lotus Resources Limited and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Lotus Resources 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 Lotus Resources Limited are associated (or correlated) with IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Lotus Resources i.e., Lotus Resources and IGO go up and down completely randomly.
Pair Corralation between Lotus Resources and IGO
Assuming the 90 days horizon Lotus Resources Limited is expected to generate 2.67 times more return on investment than IGO. However, Lotus Resources is 2.67 times more volatile than IGO Limited. It trades about 0.26 of its potential returns per unit of risk. IGO Limited is currently generating about 0.22 per unit of risk. If you would invest 12.00 in Lotus Resources Limited on October 24, 2024 and sell it today you would earn a total of 3.00 from holding Lotus Resources Limited or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Lotus Resources Limited vs. IGO Limited
Performance |
| Timeline |
| Lotus Resources |
| IGO Limited |
Lotus Resources and IGO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotus Resources and IGO
The main advantage of trading using opposite Lotus Resources and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotus Resources position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO's long position.| Lotus Resources vs. Filo Mining Corp | Lotus Resources vs. Golden Goliath Resources | Lotus Resources vs. Stria Lithium | Lotus Resources vs. Monitor Ventures |
| IGO vs. Grid Metals Corp | IGO vs. First American Silver | IGO vs. Qubec Nickel Corp | IGO vs. Lithium Australia NL |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance |