Correlation Between Western Copper and Ivanhoe Mines
Can any of the company-specific risk be diversified away by investing in both Western Copper 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 Western Copper and Ivanhoe Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Ivanhoe Mines, you can compare the effects of market volatilities on Western Copper 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 Western Copper with a short position of Ivanhoe Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Ivanhoe Mines.
Diversification Opportunities for Western Copper and Ivanhoe Mines
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Ivanhoe is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Ivanhoe Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Mines and Western Copper 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 Western Copper and 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 Western Copper i.e., Western Copper and Ivanhoe Mines go up and down completely randomly.
Pair Corralation between Western Copper and Ivanhoe Mines
Considering the 90-day investment horizon Western Copper and is expected to under-perform the Ivanhoe Mines. But the stock apears to be less risky and, when comparing its historical volatility, Western Copper and is 1.01 times less risky than Ivanhoe Mines. The stock trades about -0.02 of its potential returns per unit of risk. The Ivanhoe Mines is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,200 in Ivanhoe Mines on November 2, 2024 and sell it today you would lose (83.00) from holding Ivanhoe Mines or give up 6.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Ivanhoe Mines
Performance |
| Timeline |
| Western Copper |
| Ivanhoe Mines |
Western Copper and Ivanhoe Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Ivanhoe Mines
The main advantage of trading using opposite Western Copper and Ivanhoe Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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.| Western Copper vs. Fury Gold Mines | Western Copper vs. EMX Royalty Corp | Western Copper vs. Nevada King Gold | Western Copper vs. Aftermath Silver |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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