Correlation Between Ivanhoe Mines and Calibre Mining

Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines and Calibre Mining 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 Ivanhoe Mines and Calibre Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ivanhoe Mines and Calibre Mining Corp, you can compare the effects of market volatilities on Ivanhoe Mines and Calibre Mining 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 Ivanhoe Mines with a short position of Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and Calibre Mining.

Diversification Opportunities for Ivanhoe Mines and Calibre Mining

0.56

Correlation Coefficient

Ivanhoe Mines  Calibre Mining

Very weak diversification

The 3 months correlation between Ivanhoe and Calibre is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and Ivanhoe Mines 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 Ivanhoe Mines are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and Calibre Mining go up and down completely randomly.

Pair Corralation between Ivanhoe Mines and Calibre Mining

Assuming the 90 days trading horizon Ivanhoe Mines is expected to generate 1.01 times more return on investment than Calibre Mining. However, Ivanhoe Mines is 1.01 times more volatile than Calibre Mining Corp. It trades about -0.05 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.12 per unit of risk. If you would invest  1,882  in Ivanhoe Mines on September 20, 2024 and sell it today you would lose (195.00) from holding Ivanhoe Mines or give up 10.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ivanhoe Mines  vs.  Calibre Mining Corp

Ivanhoe Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivanhoe Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ivanhoe Mines and Calibre Mining

The main advantage of trading using opposite Ivanhoe Mines and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines position performs unexpectedly, Calibre Mining 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.

The idea behind Ivanhoe Mines and Calibre Mining Corp 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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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.