Correlation Between Tombador Iron and IXUP
Can any of the company-specific risk be diversified away by investing in both Tombador Iron and IXUP 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 Tombador Iron and IXUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tombador Iron and IXUP, you can compare the effects of market volatilities on Tombador Iron and IXUP 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 Tombador Iron with a short position of IXUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tombador Iron and IXUP.
Diversification Opportunities for Tombador Iron and IXUP
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tombador and IXUP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tombador Iron and IXUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IXUP and Tombador Iron 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 Tombador Iron are associated (or correlated) with IXUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IXUP has no effect on the direction of Tombador Iron i.e., Tombador Iron and IXUP go up and down completely randomly.
Pair Corralation between Tombador Iron and IXUP
Assuming the 90 days trading horizon Tombador Iron is expected to generate 7.59 times more return on investment than IXUP. However, Tombador Iron is 7.59 times more volatile than IXUP. It trades about 0.06 of its potential returns per unit of risk. IXUP is currently generating about -0.03 per unit of risk. If you would invest 1.40 in Tombador Iron on September 1, 2024 and sell it today you would earn a total of 33.60 from holding Tombador Iron or generate 2400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tombador Iron vs. IXUP
Performance |
| Timeline |
| Tombador Iron |
| IXUP |
Tombador Iron and IXUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tombador Iron and IXUP
The main advantage of trading using opposite Tombador Iron and IXUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tombador Iron position performs unexpectedly, IXUP 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 IXUP will offset losses from the drop in IXUP's long position.| Tombador Iron vs. Northern Star Resources | Tombador Iron vs. Evolution Mining | Tombador Iron vs. Bluescope Steel | Tombador Iron vs. Sandfire Resources 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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