Correlation Between Skeena Resources and Ivanhoe Mines

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

Diversification Opportunities for Skeena Resources and Ivanhoe Mines

0.04

Correlation Coefficient

Skeena Resources  Ivanhoe Mines

Significant diversification

The 3 months correlation between Skeena and Ivanhoe is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Skeena Resources and Ivanhoe Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Mines and Skeena 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 Skeena Resources 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 Skeena Resources i.e., Skeena Resources and Ivanhoe Mines go up and down completely randomly.

Pair Corralation between Skeena Resources and Ivanhoe Mines

Assuming the 90 days trading horizon Skeena Resources is expected to generate 1.35 times more return on investment than Ivanhoe Mines. However, Skeena Resources is 1.35 times more volatile than Ivanhoe Mines. It trades about 0.05 of its potential returns per unit of risk. Ivanhoe Mines is currently generating about 0.05 per unit of risk. If you would invest  721.00  in Skeena Resources on September 20, 2024 and sell it today you would earn a total of  558.00  from holding Skeena Resources or generate 77.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Skeena Resources  vs.  Ivanhoe Mines

Skeena Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skeena Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Skeena Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Skeena Resources and Ivanhoe Mines

The main advantage of trading using opposite Skeena Resources and Ivanhoe Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skeena 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.

The idea behind Skeena Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.