Correlation Between Ivanhoe Electric and Universal Stainless
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric and Universal Stainless 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 Universal Stainless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and Universal Stainless Alloy, you can compare the effects of market volatilities on Ivanhoe Electric and Universal Stainless 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 Universal Stainless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and Universal Stainless.
Diversification Opportunities for Ivanhoe Electric and Universal Stainless
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Universal is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Universal Stainless Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Stainless Alloy 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 Universal Stainless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Stainless Alloy has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Universal Stainless go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and Universal Stainless
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Universal Stainless. In addition to that, Ivanhoe Electric is 7.7 times more volatile than Universal Stainless Alloy. It trades about -0.24 of its total potential returns per unit of risk. Universal Stainless Alloy is currently generating about 0.19 per unit of volatility. If you would invest 4,364 in Universal Stainless Alloy on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Universal Stainless Alloy or generate 1.6% 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. Universal Stainless Alloy
Performance |
| Timeline |
| Ivanhoe Electric |
| Universal Stainless Alloy |
Ivanhoe Electric and Universal Stainless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Electric and Universal Stainless
The main advantage of trading using opposite Ivanhoe Electric and Universal Stainless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric position performs unexpectedly, Universal Stainless 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 Universal Stainless will offset losses from the drop in Universal Stainless' long position.| Ivanhoe Electric vs. Luxfer Holdings PLC | Ivanhoe Electric vs. Centessa Pharmaceuticals PLC | Ivanhoe Electric vs. Braskem SA Class | Ivanhoe Electric vs. Mativ Holdings |
| Universal Stainless vs. Olympic Steel | Universal Stainless vs. Outokumpu Oyj ADR | Universal Stainless vs. Usinas Siderurgicas de | Universal Stainless vs. POSCO Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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