Correlation Between Ivanhoe Mines and Falcon Energy
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines and Falcon Energy 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 Falcon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Mines and Falcon Energy Materials, you can compare the effects of market volatilities on Ivanhoe Mines and Falcon Energy 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 Falcon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and Falcon Energy.
Diversification Opportunities for Ivanhoe Mines and Falcon Energy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Falcon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and Falcon Energy Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Energy Materials 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 Falcon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Energy Materials has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and Falcon Energy go up and down completely randomly.
Pair Corralation between Ivanhoe Mines and Falcon Energy
Assuming the 90 days trading horizon Ivanhoe Mines is expected to generate 0.62 times more return on investment than Falcon Energy. However, Ivanhoe Mines is 1.61 times less risky than Falcon Energy. It trades about 0.04 of its potential returns per unit of risk. Falcon Energy Materials is currently generating about 0.02 per unit of risk. If you would invest 1,140 in Ivanhoe Mines on November 19, 2024 and sell it today you would earn a total of 526.00 from holding Ivanhoe Mines or generate 46.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Mines vs. Falcon Energy Materials
Performance |
| Timeline |
| Ivanhoe Mines |
| Falcon Energy Materials |
Ivanhoe Mines and Falcon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Mines and Falcon Energy
The main advantage of trading using opposite Ivanhoe Mines and Falcon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines position performs unexpectedly, Falcon Energy 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 Falcon Energy will offset losses from the drop in Falcon Energy'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 |
| Falcon Energy vs. NorthWest Healthcare Properties | Falcon Energy vs. Information Services | Falcon Energy vs. Datable Technology Corp | Falcon Energy vs. E L Financial Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |