Correlation Between Ivanhoe Electric and Warrior Met
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric and Warrior Met 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 Warrior Met into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and Warrior Met Coal, you can compare the effects of market volatilities on Ivanhoe Electric and Warrior Met 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 Warrior Met. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and Warrior Met.
Diversification Opportunities for Ivanhoe Electric and Warrior Met
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Warrior is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Warrior Met Coal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warrior Met Coal 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 Warrior Met. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warrior Met Coal has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Warrior Met go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and Warrior Met
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Warrior Met. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Electric is 1.06 times less risky than Warrior Met. The stock trades about -0.18 of its potential returns per unit of risk. The Warrior Met Coal is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,043 in Warrior Met Coal on August 26, 2024 and sell it today you would earn a total of 984.00 from holding Warrior Met Coal or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Electric vs. Warrior Met Coal
Performance |
| Timeline |
| Ivanhoe Electric |
| Warrior Met Coal |
Ivanhoe Electric and Warrior Met Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Electric and Warrior Met
The main advantage of trading using opposite Ivanhoe Electric and Warrior Met positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric position performs unexpectedly, Warrior Met 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 Warrior Met will offset losses from the drop in Warrior Met's long position.| Ivanhoe Electric vs. Labrador Gold Corp | Ivanhoe Electric vs. Aurion Resources | Ivanhoe Electric vs. Puma Exploration | Ivanhoe Electric vs. Golden Star Resource |
| Warrior Met vs. SunCoke Energy | Warrior Met vs. Arch Resources | Warrior Met vs. Alpha Metallurgical Resources | Warrior Met vs. American Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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