Correlation Between IGO and St Georges

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

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

Diversification Opportunities for IGO and St Georges

-0.59

Correlation Coefficient

IGO  St Georges

Excellent diversification

The 3 months correlation between IGO and SXOOF is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and St Georges Eco Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Georges Eco 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 St Georges. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Georges Eco has no effect on the direction of IGO i.e., IGO and St Georges go up and down completely randomly.

Pair Corralation between IGO and St Georges

Assuming the 90 days horizon IGO Limited is expected to under-perform the St Georges. But the pink sheet apears to be less risky and, when comparing its historical volatility, IGO Limited is 2.46 times less risky than St Georges. The pink sheet trades about -0.03 of its potential returns per unit of risk. The St Georges Eco Mining Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  14.00  in St Georges Eco Mining Corp on September 13, 2024 and sell it today you would lose (10.40) from holding St Georges Eco Mining Corp or give up 74.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

IGO Limited  vs.  St Georges Eco Mining Corp

IGO Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IGO Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, IGO may actually be approaching a critical reversion point that can send shares even higher in January 2025.

St Georges Eco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days St Georges Eco Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, St Georges is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IGO and St Georges

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

The idea behind IGO Limited and St Georges Eco Mining Corp 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.