Correlation Between IGG and Leaf Mobile

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

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

Diversification Opportunities for IGG and Leaf Mobile

-0.66

Correlation Coefficient

IGG  Leaf Mobile

Excellent diversification

The 3 months correlation between IGG and Leaf is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding IGG Inc and Leaf Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaf Mobile and IGG 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 IGG Inc are associated (or correlated) with Leaf Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaf Mobile has no effect on the direction of IGG i.e., IGG and Leaf Mobile go up and down completely randomly.

Pair Corralation between IGG and Leaf Mobile

Assuming the 90 days horizon IGG Inc is expected to generate 0.93 times more return on investment than Leaf Mobile. However, IGG Inc is 1.08 times less risky than Leaf Mobile. It trades about 0.13 of its potential returns per unit of risk. Leaf Mobile is currently generating about -0.1 per unit of risk. If you would invest  46.00  in IGG Inc on December 27, 2024 and sell it today you would earn a total of  13.00  from holding IGG Inc or generate 28.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

IGG Inc  vs.  Leaf Mobile

IGG Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IGG Inc are ranked lower than 10 (%) 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.

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.

Pair Trading with IGG and Leaf Mobile

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

The idea behind IGG Inc and Leaf Mobile 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 Positions Ratings module to 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.