Correlation Between IGO and Vanadiumcorp Resource

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

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

Diversification Opportunities for IGO and Vanadiumcorp Resource

-0.42

Correlation Coefficient

IGO  Vanadiumcorp Resource

Very good diversification

The 3 months correlation between IGO and Vanadiumcorp is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Vanadiumcorp Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanadiumcorp Resource 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 Vanadiumcorp Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanadiumcorp Resource has no effect on the direction of IGO i.e., IGO and Vanadiumcorp Resource go up and down completely randomly.

Pair Corralation between IGO and Vanadiumcorp Resource

Assuming the 90 days horizon IGO is expected to generate 6.67 times less return on investment than Vanadiumcorp Resource. But when comparing it to its historical volatility, IGO Limited is 10.7 times less risky than Vanadiumcorp Resource. It trades about 0.1 of its potential returns per unit of risk. Vanadiumcorp Resource is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  20.00  in Vanadiumcorp Resource on September 14, 2024 and sell it today you would lose (4.00) from holding Vanadiumcorp Resource or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

IGO Limited  vs.  Vanadiumcorp Resource

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 weak fundamental indicators, IGO may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Vanadiumcorp Resource

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vanadiumcorp Resource are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Vanadiumcorp Resource reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IGO and Vanadiumcorp Resource

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

The idea behind IGO Limited and Vanadiumcorp Resource 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.