Correlation Between NorthIsle Copper and Ivanhoe Mines
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
-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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NorthIsle Copper and vs. Ivanhoe Mines
Performance |
Timeline |
NorthIsle Copper |
Ivanhoe Mines |
NorthIsle Copper and Ivanhoe Mines Volatility Contrast
Predicted Return Density |
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.NorthIsle Copper vs. Lucky 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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