Correlation Between IGO and Cantex Mine

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

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

Diversification Opportunities for IGO and Cantex Mine

-0.63

Correlation Coefficient

IGO  Cantex Mine

Excellent diversification

The 3 months correlation between IGO and Cantex is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Cantex Mine Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantex Mine Development 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 Cantex Mine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantex Mine Development has no effect on the direction of IGO i.e., IGO and Cantex Mine go up and down completely randomly.

Pair Corralation between IGO and Cantex Mine

Assuming the 90 days horizon IGO Limited is expected to under-perform the Cantex Mine. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 4.36 times less risky than Cantex Mine. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Cantex Mine Development is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  7.23  in Cantex Mine Development on December 28, 2024 and sell it today you would earn a total of  5.77  from holding Cantex Mine Development or generate 79.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

IGO Limited  vs.  Cantex Mine Development

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.

Cantex Mine Development

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cantex Mine Development are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cantex Mine reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IGO and Cantex Mine

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

The idea behind IGO Limited and Cantex Mine Development 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.