Correlation Between IGO and Eskay Mining
Can any of the company-specific risk be diversified away by investing in both IGO and Eskay Mining 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 Eskay Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGO Limited and Eskay Mining Corp, you can compare the effects of market volatilities on IGO and Eskay Mining 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 Eskay Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGO and Eskay Mining.
Diversification Opportunities for IGO and Eskay Mining
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IGO and Eskay is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Eskay Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eskay Mining Corp 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 Eskay Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eskay Mining Corp has no effect on the direction of IGO i.e., IGO and Eskay Mining go up and down completely randomly.
Pair Corralation between IGO and Eskay Mining
Assuming the 90 days horizon IGO Limited is expected to generate 0.6 times more return on investment than Eskay Mining. However, IGO Limited is 1.66 times less risky than Eskay Mining. It trades about -0.03 of its potential returns per unit of risk. Eskay Mining Corp is currently generating about -0.04 per unit of risk. If you would invest 1,554 in IGO Limited on September 12, 2024 and sell it today you would lose (874.00) from holding IGO Limited or give up 56.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
IGO Limited vs. Eskay Mining Corp
Performance |
Timeline |
IGO Limited |
Eskay Mining Corp |
IGO and Eskay Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IGO and Eskay Mining
The main advantage of trading using opposite IGO and Eskay Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGO position performs unexpectedly, Eskay Mining 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 Eskay Mining will offset losses from the drop in Eskay Mining's long position.IGO vs. Qubec Nickel Corp | IGO vs. Nickel Mines Limited | IGO vs. Mineral Resources Limited | IGO vs. Surge Copper Corp |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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