Correlation Between Nucor Corp and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both Nucor Corp 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 Nucor Corp and Ivanhoe Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nucor Corp and Ivanhoe Electric, you can compare the effects of market volatilities on Nucor Corp 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 Nucor Corp with a short position of Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nucor Corp and Ivanhoe Electric.
Diversification Opportunities for Nucor Corp and Ivanhoe Electric
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nucor and Ivanhoe is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nucor Corp and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and Nucor Corp 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 Nucor 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 Nucor Corp i.e., Nucor Corp and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between Nucor Corp and Ivanhoe Electric
Considering the 90-day investment horizon Nucor Corp is expected to generate 0.57 times more return on investment than Ivanhoe Electric. However, Nucor Corp is 1.75 times less risky than Ivanhoe Electric. It trades about -0.12 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.11 per unit of risk. If you would invest 13,189 in Nucor Corp on January 4, 2025 and sell it today you would lose (886.00) from holding Nucor Corp or give up 6.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nucor Corp vs. Ivanhoe Electric
Performance |
| Timeline |
| Nucor Corp |
| Ivanhoe Electric |
Nucor Corp and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nucor Corp and Ivanhoe Electric
The main advantage of trading using opposite Nucor Corp and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nucor Corp 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.| Nucor Corp vs. United States Steel | Nucor Corp vs. Reliance Steel Aluminum | Nucor Corp vs. ArcelorMittal SA ADR | Nucor Corp vs. Commercial Metals |
| Ivanhoe Electric vs. Broadstone Net Lease | Ivanhoe Electric vs. Westshore Terminals Investment | Ivanhoe Electric vs. ZW Data Action | Ivanhoe Electric vs. Stagwell |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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