Correlation Between Ivanhoe Electric and United States
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric and United States 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 Electric and United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and United States Steel, you can compare the effects of market volatilities on Ivanhoe Electric and United States 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 Electric with a short position of United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and United States.
Diversification Opportunities for Ivanhoe Electric and United States
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ivanhoe and United is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel and Ivanhoe Electric 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 Electric are associated (or correlated) with United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and United States go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and United States
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the United States. In addition to that, Ivanhoe Electric is 2.36 times more volatile than United States Steel. It trades about -0.14 of its total potential returns per unit of risk. United States Steel is currently generating about 0.03 per unit of volatility. If you would invest 3,808 in United States Steel on March 8, 2024 and sell it today you would earn a total of 29.00 from holding United States Steel or generate 0.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Ivanhoe Electric vs. United States Steel
Performance |
Timeline |
Ivanhoe Electric |
United States Steel |
Ivanhoe Electric and United States Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ivanhoe Electric and United States
The main advantage of trading using opposite Ivanhoe Electric and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.Ivanhoe Electric vs. Ero Copper Corp | Ivanhoe Electric vs. Amerigo Resources | Ivanhoe Electric vs. Hudbay Minerals | Ivanhoe Electric vs. Copper Mountain Mining |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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