Correlation Between Leaf Mobile and IGG

Can any of the company-specific risk be diversified away by investing in both Leaf Mobile and IGG 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 Leaf Mobile and IGG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Leaf Mobile and IGG Inc, you can compare the effects of market volatilities on Leaf Mobile and IGG 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 Leaf Mobile with a short position of IGG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leaf Mobile and IGG.

Diversification Opportunities for Leaf Mobile and IGG

-0.32

Correlation Coefficient

Leaf Mobile  IGG

Very good diversification

The 3 months correlation between Leaf and IGG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Leaf Mobile and IGG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGG Inc and Leaf Mobile 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 Leaf Mobile are associated (or correlated) with IGG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGG Inc has no effect on the direction of Leaf Mobile i.e., Leaf Mobile and IGG go up and down completely randomly.

Pair Corralation between Leaf Mobile and IGG

Assuming the 90 days horizon Leaf Mobile is expected to under-perform the IGG. But the otc stock apears to be less risky and, when comparing its historical volatility, Leaf Mobile is 1.05 times less risky than IGG. The otc stock trades about -0.08 of its potential returns per unit of risk. The IGG Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  46.00  in IGG Inc on December 2, 2024 and sell it today you would earn a total of  7.00  from holding IGG Inc or generate 15.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	76.19%
Values	Daily Returns

Leaf Mobile  vs.  IGG Inc

Leaf Mobile

Risk-Adjusted Performance

Very Weak

Over the last 90 days Leaf Mobile has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

IGG Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IGG Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, IGG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Leaf Mobile and IGG

The main advantage of trading using opposite Leaf Mobile and IGG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leaf Mobile position performs unexpectedly, IGG 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 IGG will offset losses from the drop in IGG's long position.

The idea behind Leaf Mobile and IGG Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.