Correlation Between Thunderstruck Resources and Ivanhoe Mines
Can any of the company-specific risk be diversified away by investing in both Thunderstruck Resources 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 Thunderstruck Resources and Ivanhoe Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thunderstruck Resources and Ivanhoe Mines, you can compare the effects of market volatilities on Thunderstruck Resources 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 Thunderstruck Resources with a short position of Ivanhoe Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thunderstruck Resources and Ivanhoe Mines.
Diversification Opportunities for Thunderstruck Resources and Ivanhoe Mines
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thunderstruck and Ivanhoe is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thunderstruck Resources and Ivanhoe Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Mines and Thunderstruck Resources 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 Thunderstruck Resources 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 Thunderstruck Resources i.e., Thunderstruck Resources and Ivanhoe Mines go up and down completely randomly.
Pair Corralation between Thunderstruck Resources and Ivanhoe Mines
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 | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Thunderstruck Resources vs. Ivanhoe Mines
Performance |
| Timeline |
| Thunderstruck Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ivanhoe Mines |
Thunderstruck Resources and Ivanhoe Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thunderstruck Resources and Ivanhoe Mines
The main advantage of trading using opposite Thunderstruck Resources and Ivanhoe Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thunderstruck Resources 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.The idea behind Thunderstruck Resources and Ivanhoe Mines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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