Correlation Between Eastern Platinum and Ivanhoe Mines
Can any of the company-specific risk be diversified away by investing in both Eastern Platinum 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 Eastern Platinum and Ivanhoe Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastern Platinum Limited and Ivanhoe Mines, you can compare the effects of market volatilities on Eastern Platinum 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 Eastern Platinum with a short position of Ivanhoe Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastern Platinum and Ivanhoe Mines.
Diversification Opportunities for Eastern Platinum and Ivanhoe Mines
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastern and Ivanhoe is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Platinum Limited and Ivanhoe Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Mines and Eastern Platinum 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 Eastern Platinum Limited 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 Eastern Platinum i.e., Eastern Platinum and Ivanhoe Mines go up and down completely randomly.
Pair Corralation between Eastern Platinum and Ivanhoe Mines
Assuming the 90 days trading horizon Eastern Platinum Limited is expected to generate 0.45 times more return on investment than Ivanhoe Mines. However, Eastern Platinum Limited is 2.24 times less risky than Ivanhoe Mines. It trades about 0.01 of its potential returns per unit of risk. Ivanhoe Mines is currently generating about -0.09 per unit of risk. If you would invest 17.00 in Eastern Platinum Limited on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Eastern Platinum Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastern Platinum Limited vs. Ivanhoe Mines
Performance |
| Timeline |
| Eastern Platinum |
| Ivanhoe Mines |
Eastern Platinum and Ivanhoe Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastern Platinum and Ivanhoe Mines
The main advantage of trading using opposite Eastern Platinum and Ivanhoe Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastern Platinum 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.| Eastern Platinum vs. Platinum Group Metals | Eastern Platinum vs. Entree Resources | Eastern Platinum vs. Aura Minerals | Eastern Platinum vs. Minco Silver |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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