Correlation Between Ivanhoe Mines and Capstone Mining
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines and Capstone 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 Mines and Capstone Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Mines and Capstone Mining Corp, you can compare the effects of market volatilities on Ivanhoe Mines and Capstone 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 Mines with a short position of Capstone Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and Capstone Mining.
Diversification Opportunities for Ivanhoe Mines and Capstone Mining
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ivanhoe and Capstone is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp and Ivanhoe Mines 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 Mines are associated (or correlated) with Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and Capstone Mining go up and down completely randomly.
Pair Corralation between Ivanhoe Mines and Capstone Mining
Assuming the 90 days trading horizon Ivanhoe Mines is expected to under-perform the Capstone Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Mines is 1.25 times less risky than Capstone Mining. The stock trades about -0.16 of its potential returns per unit of risk. The Capstone Mining Corp is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 891.00 in Capstone Mining Corp on November 3, 2024 and sell it today you would lose (77.00) from holding Capstone Mining Corp or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Mines vs. Capstone Mining Corp
Performance |
| Timeline |
| Ivanhoe Mines |
| Capstone Mining Corp |
Ivanhoe Mines and Capstone Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Mines and Capstone Mining
The main advantage of trading using opposite Ivanhoe Mines and Capstone Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines position performs unexpectedly, Capstone 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 Capstone Mining will offset losses from the drop in Capstone Mining's long position.| Ivanhoe Mines vs. Lundin Mining | Ivanhoe Mines vs. First Quantum Minerals | Ivanhoe Mines vs. HudBay Minerals | Ivanhoe Mines vs. Eldorado Gold Corp |
| Capstone Mining vs. Pace Metals | Capstone Mining vs. Nano One Materials | Capstone Mining vs. NeXGold Mining Corp | Capstone Mining vs. Andean Precious Metals |
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 Stocks Directory module to find actively traded stocks across global markets.
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