Correlation Between Calibre Mining and Ivanhoe Mines
Can any of the company-specific risk be diversified away by investing in both Calibre Mining and Ivanhoe Mines 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 Calibre Mining and Ivanhoe Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calibre Mining Corp and Ivanhoe Mines, you can compare the effects of market volatilities on Calibre Mining and Ivanhoe Mines 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 Calibre Mining with a short position of Ivanhoe Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and Ivanhoe Mines.
Diversification Opportunities for Calibre Mining and Ivanhoe Mines
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Calibre and Ivanhoe is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Ivanhoe Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Mines and Calibre Mining 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 Calibre Mining Corp are associated (or correlated) with Ivanhoe Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Mines has no effect on the direction of Calibre Mining i.e., Calibre Mining and Ivanhoe Mines go up and down completely randomly.
Pair Corralation between Calibre Mining and Ivanhoe Mines
Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the Ivanhoe Mines. But the stock apears to be less risky and, when comparing its historical volatility, Calibre Mining Corp is 1.18 times less risky than Ivanhoe Mines. The stock trades about -0.15 of its potential returns per unit of risk. The Ivanhoe Mines is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,933 in Ivanhoe Mines on August 25, 2024 and sell it today you would lose (24.00) from holding Ivanhoe Mines or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calibre Mining Corp vs. Ivanhoe Mines
Performance |
| Timeline |
| Calibre Mining Corp |
| Ivanhoe Mines |
Calibre Mining and Ivanhoe Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calibre Mining and Ivanhoe Mines
The main advantage of trading using opposite Calibre Mining and Ivanhoe Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining position performs unexpectedly, Ivanhoe Mines 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 Ivanhoe Mines will offset losses from the drop in Ivanhoe Mines' long position.The idea behind Calibre Mining Corp and Ivanhoe Mines 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.| Ivanhoe Mines vs. Lundin Mining | Ivanhoe Mines vs. First Quantum Minerals | Ivanhoe Mines vs. HudBay Minerals | Ivanhoe Mines vs. Eldorado Gold Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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