Correlation Between IGO and Bayhorse Silver

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

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

Diversification Opportunities for IGO and Bayhorse Silver

-0.17

Correlation Coefficient

IGO  Bayhorse Silver

Good diversification

The 3 months correlation between IGO and Bayhorse is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding IGO Limited and Bayhorse Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayhorse Silver 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 Bayhorse Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayhorse Silver has no effect on the direction of IGO i.e., IGO and Bayhorse Silver go up and down completely randomly.

Pair Corralation between IGO and Bayhorse Silver

Assuming the 90 days horizon IGO is expected to generate 8.37 times less return on investment than Bayhorse Silver. But when comparing it to its historical volatility, IGO Limited is 7.94 times less risky than Bayhorse Silver. It trades about 0.1 of its potential returns per unit of risk. Bayhorse Silver is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Bayhorse Silver on September 13, 2024 and sell it today you would earn a total of  1.39  from holding Bayhorse Silver or generate 46.33% return on investment over 90 days.

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

IGO Limited  vs.  Bayhorse Silver

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.

Bayhorse Silver

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bayhorse Silver are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Bayhorse Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IGO and Bayhorse Silver

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

The idea behind IGO Limited and Bayhorse Silver 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.