Correlation Between Vail Resorts and Ichor Coal

Can any of the company-specific risk be diversified away by investing in both Vail Resorts and Ichor Coal 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 Vail Resorts and Ichor Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vail Resorts and Ichor Coal NV, you can compare the effects of market volatilities on Vail Resorts and Ichor Coal 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 Vail Resorts with a short position of Ichor Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vail Resorts and Ichor Coal.

Diversification Opportunities for Vail Resorts and Ichor Coal

-0.72

Correlation Coefficient

Vail Resorts  Ichor Coal

Pay attention - limited upside

The 3 months correlation between Vail and Ichor is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vail Resorts and Ichor Coal NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Coal NV and Vail Resorts 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 Vail Resorts are associated (or correlated) with Ichor Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Coal NV has no effect on the direction of Vail Resorts i.e., Vail Resorts and Ichor Coal go up and down completely randomly.

Pair Corralation between Vail Resorts and Ichor Coal

Assuming the 90 days horizon Vail Resorts is expected to under-perform the Ichor Coal. But the stock apears to be less risky and, when comparing its historical volatility, Vail Resorts is 2.4 times less risky than Ichor Coal. The stock trades about -0.12 of its potential returns per unit of risk. The Ichor Coal NV is currently generating about 0.57 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Ichor Coal NV on October 12, 2024 and sell it today you would earn a total of  1.00  from holding Ichor Coal NV or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	77.78%
Values	Daily Returns

Vail Resorts  vs.  Ichor Coal NV

Vail Resorts

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vail Resorts are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Vail Resorts reported solid returns over the last few months and may actually be approaching a breakup point.

Ichor Coal NV

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Ichor Coal NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very fragile basic indicators, Ichor Coal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Vail Resorts and Ichor Coal

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

The idea behind Vail Resorts and Ichor Coal NV 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.