Correlation Between United States and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Ivanhoe Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Ivanhoe Electric, you can compare the effects of market volatilities on United States 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 United States with a short position of Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Ivanhoe Electric.
Diversification Opportunities for United States and Ivanhoe Electric
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Ivanhoe is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and United States 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 United States Steel 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 United States i.e., United States and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between United States and Ivanhoe Electric
Taking into account the 90-day investment horizon United States Steel is expected to generate 0.95 times more return on investment than Ivanhoe Electric. However, United States Steel is 1.05 times less risky than Ivanhoe Electric. It trades about 0.05 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.21 per unit of risk. If you would invest 3,941 in United States Steel on August 30, 2024 and sell it today you would earn a total of 104.00 from holding United States Steel or generate 2.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United States Steel vs. Ivanhoe Electric
Performance |
| Timeline |
| United States Steel |
| Ivanhoe Electric |
United States and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Ivanhoe Electric
The main advantage of trading using opposite United States and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
| Ivanhoe Electric vs. Primoris Services | Ivanhoe Electric vs. Jacobs Solutions | Ivanhoe Electric vs. Newpark Resources | Ivanhoe Electric vs. Paiute Oil Mining |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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