Correlation Between Ivanhoe Electric and Gold Resource
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric and Gold Resource 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 Ivanhoe Electric and Gold Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and Gold Resource, you can compare the effects of market volatilities on Ivanhoe Electric and Gold Resource 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 Ivanhoe Electric with a short position of Gold Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and Gold Resource.
Diversification Opportunities for Ivanhoe Electric and Gold Resource
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ivanhoe and Gold is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Gold Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Resource and Ivanhoe Electric 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 Ivanhoe Electric are associated (or correlated) with Gold Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Resource has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Gold Resource go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and Gold Resource
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Gold Resource. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Electric is 2.49 times less risky than Gold Resource. The stock trades about -0.21 of its potential returns per unit of risk. The Gold Resource is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Gold Resource on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Gold Resource or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Electric vs. Gold Resource
Performance |
| Timeline |
| Ivanhoe Electric |
| Gold Resource |
Ivanhoe Electric and Gold Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Electric and Gold Resource
The main advantage of trading using opposite Ivanhoe Electric and Gold Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric position performs unexpectedly, Gold Resource 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 Gold Resource will offset losses from the drop in Gold Resource's long position.| Ivanhoe Electric vs. Primoris Services | Ivanhoe Electric vs. Jacobs Solutions | Ivanhoe Electric vs. Newpark Resources | Ivanhoe Electric vs. Paiute Oil Mining |
| Gold Resource vs. IAMGold | Gold Resource vs. Eldorado Gold Corp | Gold Resource vs. Coeur Mining | Gold Resource vs. Alamos Gold |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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