Correlation Between Ivanhoe Mines and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines and Eldorado Gold 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 Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Mines and Eldorado Gold Corp, you can compare the effects of market volatilities on Ivanhoe Mines and Eldorado Gold 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 Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and Eldorado Gold.
Diversification Opportunities for Ivanhoe Mines and Eldorado Gold
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ivanhoe and Eldorado is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and Eldorado Gold go up and down completely randomly.
Pair Corralation between Ivanhoe Mines and Eldorado Gold
Assuming the 90 days trading horizon Ivanhoe Mines is expected to generate 1.13 times more return on investment than Eldorado Gold. However, Ivanhoe Mines is 1.13 times more volatile than Eldorado Gold Corp. It trades about 0.0 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.1 per unit of risk. If you would invest 1,933 in Ivanhoe Mines on August 25, 2024 and sell it today you would lose (24.00) from holding Ivanhoe Mines or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Mines vs. Eldorado Gold Corp
Performance |
| Timeline |
| Ivanhoe Mines |
| Eldorado Gold Corp |
Ivanhoe Mines and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Mines and Eldorado Gold
The main advantage of trading using opposite Ivanhoe Mines and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines position performs unexpectedly, Eldorado Gold 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 Eldorado Gold will offset losses from the drop in Eldorado Gold'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 |
| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold Corp | Eldorado Gold vs. Alamos Gold | Eldorado Gold vs. Agnico Eagle Mines |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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