Correlation Between IGO and Aftermath Silver

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

By analyzing existing cross correlation between IGO Limited and Aftermath Silver, you can compare the effects of market volatilities on IGO and Aftermath Silver 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 Aftermath Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Aftermath Silver.

Diversification Opportunities for IGO and Aftermath Silver

-0.28

Correlation Coefficient

IGO  Aftermath Silver

Very good diversification

The 3 months correlation between IGO and Aftermath is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver 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 Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of IGO i.e., IGO and Aftermath Silver go up and down completely randomly.

Pair Corralation between IGO and Aftermath Silver

Assuming the 90 days horizon IGO Limited is expected to generate 0.74 times more return on investment than Aftermath Silver. However, IGO Limited is 1.35 times less risky than Aftermath Silver. It trades about -0.03 of its potential returns per unit of risk. Aftermath Silver is currently generating about -0.09 per unit of risk. If you would invest  573.00  in IGO Limited on December 2, 2024 and sell it today you would lose (22.00) from holding IGO Limited or give up 3.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

IGO Limited  vs.  Aftermath Silver

IGO Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days IGO Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Aftermath Silver

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aftermath Silver are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Aftermath Silver may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with IGO and Aftermath Silver

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

The idea behind IGO Limited and Aftermath Silver 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.