Correlation Between IGO and Giyani Metals

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

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

Diversification Opportunities for IGO and Giyani Metals

0.16

Correlation Coefficient

IGO  Giyani Metals

Average diversification

The 3 months correlation between IGO and Giyani is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Giyani Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giyani Metals 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 Giyani Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giyani Metals Corp has no effect on the direction of IGO i.e., IGO and Giyani Metals go up and down completely randomly.

Pair Corralation between IGO and Giyani Metals

Assuming the 90 days horizon IGO is expected to generate 1.13 times less return on investment than Giyani Metals. In addition to that, IGO is 1.11 times more volatile than Giyani Metals Corp. It trades about 0.02 of its total potential returns per unit of risk. Giyani Metals Corp is currently generating about 0.03 per unit of volatility. If you would invest  11.00  in Giyani Metals Corp on September 3, 2024 and sell it today you would lose (4.00) from holding Giyani Metals Corp or give up 36.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.33%
Values	Daily Returns

IGO Limited  vs.  Giyani Metals Corp

IGO Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Giyani Metals Corp

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with IGO and Giyani Metals

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

The idea behind IGO Limited and Giyani Metals 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.