Correlation Between South32 and Ivanhoe Mines
Can any of the company-specific risk be diversified away by investing in both South32 and Ivanhoe Mines 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 South32 and Ivanhoe Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South32 Limited and Ivanhoe Mines, you can compare the effects of market volatilities on South32 and Ivanhoe Mines 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 South32 with a short position of Ivanhoe Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of South32 and Ivanhoe Mines.
Diversification Opportunities for South32 and Ivanhoe Mines
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between South32 and Ivanhoe is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding South32 Limited and Ivanhoe Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Mines and South32 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 South32 Limited are associated (or correlated) with Ivanhoe Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Mines has no effect on the direction of South32 i.e., South32 and Ivanhoe Mines go up and down completely randomly.
Pair Corralation between South32 and Ivanhoe Mines
Assuming the 90 days horizon South32 is expected to generate 1.72 times less return on investment than Ivanhoe Mines. In addition to that, South32 is 1.24 times more volatile than Ivanhoe Mines. It trades about 0.03 of its total potential returns per unit of risk. Ivanhoe Mines is currently generating about 0.06 per unit of volatility. If you would invest 1,004 in Ivanhoe Mines on September 3, 2024 and sell it today you would earn a total of 355.00 from holding Ivanhoe Mines or generate 35.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.35% |
| Values | Daily Returns |
South32 Limited vs. Ivanhoe Mines
Performance |
| Timeline |
| South32 Limited |
| Ivanhoe Mines |
South32 and Ivanhoe Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South32 and Ivanhoe Mines
The main advantage of trading using opposite South32 and Ivanhoe Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South32 position performs unexpectedly, Ivanhoe Mines 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 Mines will offset losses from the drop in Ivanhoe Mines' long position.| South32 vs. IGO Limited | South32 vs. Anglo American PLC | South32 vs. TNG Limited | South32 vs. Amarc Resources |
| Ivanhoe Mines vs. Fury Gold Mines | Ivanhoe Mines vs. EMX Royalty Corp | Ivanhoe Mines vs. Western Copper and | Ivanhoe Mines vs. Nevada King Gold |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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