Correlation Between Ivanhoe Mines and Kenorland Minerals

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

By analyzing existing cross correlation between Ivanhoe Mines and Kenorland Minerals, you can compare the effects of market volatilities on Ivanhoe Mines and Kenorland Minerals 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 Kenorland Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and Kenorland Minerals.

Diversification Opportunities for Ivanhoe Mines and Kenorland Minerals

-0.11

Correlation Coefficient

Ivanhoe Mines  Kenorland Minerals

Good diversification

The 3 months correlation between Ivanhoe and Kenorland is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and Kenorland Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenorland Minerals 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 Kenorland Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenorland Minerals has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and Kenorland Minerals go up and down completely randomly.

Pair Corralation between Ivanhoe Mines and Kenorland Minerals

Assuming the 90 days horizon Ivanhoe Mines is expected to under-perform the Kenorland Minerals. But the otc stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Mines is 2.03 times less risky than Kenorland Minerals. The otc stock trades about -0.24 of its potential returns per unit of risk. The Kenorland Minerals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  76.00  in Kenorland Minerals on October 22, 2024 and sell it today you would earn a total of  7.00  from holding Kenorland Minerals or generate 9.21% return on investment over 90 days.

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

Ivanhoe Mines  vs.  Kenorland Minerals

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. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Kenorland Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kenorland Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Kenorland Minerals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ivanhoe Mines and Kenorland Minerals

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

The idea behind Ivanhoe Mines and Kenorland Minerals 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.