Correlation Between Ivanhoe Mines and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines and Eastern Platinum 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 Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Mines and Eastern Platinum Limited, you can compare the effects of market volatilities on Ivanhoe Mines and Eastern Platinum 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 Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and Eastern Platinum.
Diversification Opportunities for Ivanhoe Mines and Eastern Platinum
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ivanhoe and Eastern is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum 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 Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and Eastern Platinum go up and down completely randomly.
Pair Corralation between Ivanhoe Mines and Eastern Platinum
Assuming the 90 days trading horizon Ivanhoe Mines is expected to under-perform the Eastern Platinum. In addition to that, Ivanhoe Mines is 2.24 times more volatile than Eastern Platinum Limited. It trades about -0.09 of its total potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.01 per unit of volatility. If you would invest 17.00 in Eastern Platinum Limited on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Eastern Platinum Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Mines vs. Eastern Platinum Limited
Performance |
| Timeline |
| Ivanhoe Mines |
| Eastern Platinum |
Ivanhoe Mines and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Mines and Eastern Platinum
The main advantage of trading using opposite Ivanhoe Mines and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum'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 |
| Eastern Platinum vs. Platinum Group Metals | Eastern Platinum vs. Entree Resources | Eastern Platinum vs. Aura Minerals | Eastern Platinum vs. Minco Silver |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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