Correlation Between Labrador Gold and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both Labrador Gold and Ivanhoe Electric 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 Labrador Gold and Ivanhoe Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labrador Gold Corp and Ivanhoe Electric, you can compare the effects of market volatilities on Labrador Gold and Ivanhoe Electric 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 Labrador Gold with a short position of Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labrador Gold and Ivanhoe Electric.
Diversification Opportunities for Labrador Gold and Ivanhoe Electric
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Labrador and Ivanhoe is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Labrador Gold Corp and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and Labrador Gold 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 Labrador Gold Corp are associated (or correlated) with Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Labrador Gold i.e., Labrador Gold and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between Labrador Gold and Ivanhoe Electric
Assuming the 90 days horizon Labrador Gold Corp is expected to under-perform the Ivanhoe Electric. In addition to that, Labrador Gold is 1.85 times more volatile than Ivanhoe Electric. It trades about -0.16 of its total potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.18 per unit of volatility. If you would invest 1,092 in Ivanhoe Electric on August 26, 2024 and sell it today you would lose (133.00) from holding Ivanhoe Electric or give up 12.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labrador Gold Corp vs. Ivanhoe Electric
Performance |
| Timeline |
| Labrador Gold Corp |
| Ivanhoe Electric |
Labrador Gold and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labrador Gold and Ivanhoe Electric
The main advantage of trading using opposite Labrador Gold and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labrador Gold position performs unexpectedly, Ivanhoe Electric 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 Ivanhoe Electric will offset losses from the drop in Ivanhoe Electric's long position.| Labrador Gold vs. Exploits Discovery Corp | Labrador Gold vs. Mako Mining Corp | Labrador Gold vs. Puma Exploration | Labrador Gold vs. Aurion Resources |
| Ivanhoe Electric vs. Labrador Gold Corp | Ivanhoe Electric vs. Aurion Resources | Ivanhoe Electric vs. Puma Exploration | Ivanhoe Electric vs. Golden Star Resource |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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