Correlation Between NorthIsle Copper and Ivanhoe Mines

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Can any of the company-specific risk be diversified away by investing in both NorthIsle 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 NorthIsle 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 NorthIsle Copper and and Ivanhoe Mines, you can compare the effects of market volatilities on NorthIsle 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 NorthIsle Copper with a short position of Ivanhoe Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorthIsle Copper and Ivanhoe Mines.

Diversification Opportunities for NorthIsle Copper and Ivanhoe Mines

NorthIsleIvanhoeDiversified AwayNorthIsleIvanhoeDiversified Away100%
-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between NorthIsle and Ivanhoe is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NorthIsle 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 NorthIsle 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 NorthIsle 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 NorthIsle Copper i.e., NorthIsle Copper and Ivanhoe Mines go up and down completely randomly.

Pair Corralation between NorthIsle Copper and Ivanhoe Mines

Assuming the 90 days horizon NorthIsle Copper and is expected to generate 1.32 times more return on investment than Ivanhoe Mines. However, NorthIsle Copper is 1.32 times more volatile than Ivanhoe Mines. It trades about 0.14 of its potential returns per unit of risk. Ivanhoe Mines is currently generating about -0.12 per unit of risk. If you would invest  31.00  in NorthIsle Copper and on November 24, 2024 and sell it today you would earn a total of  11.00  from holding NorthIsle Copper and or generate 35.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

NorthIsle Copper and  vs.  Ivanhoe Mines

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030
JavaScript chart by amCharts 3.21.15NTCPF IVPAF
       Timeline  
NorthIsle Copper 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in NorthIsle Copper and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NorthIsle Copper reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.30.350.40.45
Ivanhoe Mines 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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 March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb101112131415

NorthIsle Copper and Ivanhoe Mines Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.89-9.65-6.42-3.180.03.46.8510.3113.76 0.0100.0150.0200.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15NTCPF IVPAF
       Returns  

Pair Trading with NorthIsle Copper and Ivanhoe Mines

The main advantage of trading using opposite NorthIsle Copper and Ivanhoe Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorthIsle 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.
The idea behind NorthIsle Copper and and Ivanhoe Mines 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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