Correlation Between Ivanhoe Mines and African Rainbow
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines and African Rainbow 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 African Rainbow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Mines and African Rainbow Minerals, you can compare the effects of market volatilities on Ivanhoe Mines and African Rainbow 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 African Rainbow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and African Rainbow.
Diversification Opportunities for Ivanhoe Mines and African Rainbow
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ivanhoe and African is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and African Rainbow Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Rainbow Minerals 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 African Rainbow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Rainbow Minerals has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and African Rainbow go up and down completely randomly.
Pair Corralation between Ivanhoe Mines and African Rainbow
If you would invest 1,320 in Ivanhoe Mines on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Ivanhoe Mines or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ivanhoe Mines vs. African Rainbow Minerals
Performance |
| Timeline |
| Ivanhoe Mines |
| African Rainbow Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ivanhoe Mines and African Rainbow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Mines and African Rainbow
The main advantage of trading using opposite Ivanhoe Mines and African Rainbow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines position performs unexpectedly, African Rainbow 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 African Rainbow will offset losses from the drop in African Rainbow's long position.| Ivanhoe Mines vs. Fury Gold Mines | Ivanhoe Mines vs. EMX Royalty Corp | Ivanhoe Mines vs. Western Copper and | Ivanhoe Mines vs. Nevada King Gold |
| African Rainbow vs. Ivanhoe Mines | African Rainbow vs. Glencore PLC | African Rainbow vs. Asia Broadband | African Rainbow vs. Rio Tinto Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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