Correlation Between Ivanhoe Electric and Orla Mining
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric and Orla Mining 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 Orla Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and Orla Mining, you can compare the effects of market volatilities on Ivanhoe Electric and Orla Mining 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 Orla Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and Orla Mining.
Diversification Opportunities for Ivanhoe Electric and Orla Mining
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Orla is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Orla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orla Mining 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 Orla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orla Mining has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Orla Mining go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and Orla Mining
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Orla Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Electric is 1.28 times less risky than Orla Mining. The stock trades about -0.22 of its potential returns per unit of risk. The Orla Mining is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 494.00 in Orla Mining on August 27, 2024 and sell it today you would lose (35.00) from holding Orla Mining or give up 7.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Electric vs. Orla Mining
Performance |
| Timeline |
| Ivanhoe Electric |
| Orla Mining |
Ivanhoe Electric and Orla Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Electric and Orla Mining
The main advantage of trading using opposite Ivanhoe Electric and Orla Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric position performs unexpectedly, Orla Mining 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 Orla Mining will offset losses from the drop in Orla Mining'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 |
| Orla Mining vs. K92 Mining | Orla Mining vs. Equinox Gold Corp | Orla Mining vs. Contango ORE | Orla Mining vs. Sandstorm Gold Ltd |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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