Correlation Between Allkem and IGO
Can any of the company-specific risk be diversified away by investing in both Allkem and IGO 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 Allkem and IGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allkem and IGO Limited, you can compare the effects of market volatilities on Allkem and IGO 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 Allkem with a short position of IGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allkem and IGO.
Diversification Opportunities for Allkem and IGO
Pay attention - limited upside
The 3 months correlation between Allkem and IGO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Allkem and IGO Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGO Limited and Allkem 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 Allkem are associated (or correlated) with IGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGO Limited has no effect on the direction of Allkem i.e., Allkem and IGO go up and down completely randomly.
Pair Corralation between Allkem and IGO
If you would invest (100.00) in Allkem on December 28, 2024 and sell it today you would earn a total of 100.00 from holding Allkem or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Allkem vs. IGO Limited
Performance |
Timeline |
Allkem |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
IGO Limited |
Allkem and IGO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allkem and IGO
The main advantage of trading using opposite Allkem and IGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allkem position performs unexpectedly, IGO 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 IGO will offset losses from the drop in IGO's long position.Allkem vs. PennantPark Floating Rate | Allkem vs. Malaga Financial | Allkem vs. Aldel Financial II | Allkem vs. Barings BDC |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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