Correlation Between Alphamin Resources and Ivanhoe Mines
Can any of the company-specific risk be diversified away by investing in both Alphamin 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 Alphamin 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 Alphamin Resources Corp and Ivanhoe Mines, you can compare the effects of market volatilities on Alphamin 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 Alphamin Resources with a short position of Ivanhoe Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphamin Resources and Ivanhoe Mines.
Diversification Opportunities for Alphamin Resources and Ivanhoe Mines
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alphamin and Ivanhoe is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Alphamin Resources Corp and Ivanhoe Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Mines and Alphamin 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 Alphamin Resources Corp 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 Alphamin Resources i.e., Alphamin Resources and Ivanhoe Mines go up and down completely randomly.
Pair Corralation between Alphamin Resources and Ivanhoe Mines
Assuming the 90 days horizon Alphamin Resources Corp is expected to under-perform the Ivanhoe Mines. In addition to that, Alphamin Resources is 1.02 times more volatile than Ivanhoe Mines. It trades about -0.22 of its total potential returns per unit of risk. Ivanhoe Mines is currently generating about -0.12 per unit of volatility. If you would invest 1,365 in Ivanhoe Mines on November 24, 2024 and sell it today you would lose (313.00) from holding Ivanhoe Mines or give up 22.93% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Alphamin Resources Corp vs. Ivanhoe Mines
Performance |
Timeline |
Alphamin Resources Corp |
Ivanhoe Mines |
Alphamin Resources and Ivanhoe Mines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alphamin Resources and Ivanhoe Mines
The main advantage of trading using opposite Alphamin Resources and Ivanhoe Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphamin 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.Alphamin Resources vs. NGEx Minerals | ||
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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