Correlation Between Hycroft Mining and Ivanhoe Electric

Can any of the company-specific risk be diversified away by investing in both Hycroft Mining and Ivanhoe Electric 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 Hycroft Mining and Ivanhoe Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hycroft Mining Holding and Ivanhoe Electric, you can compare the effects of market volatilities on Hycroft Mining and Ivanhoe Electric 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 Hycroft Mining with a short position of Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and Ivanhoe Electric.

Diversification Opportunities for Hycroft Mining and Ivanhoe Electric

-0.41

Correlation Coefficient

Hycroft Mining  Ivanhoe Electric

Very good diversification

The 3 months correlation between Hycroft and Ivanhoe is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and Hycroft Mining 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 Hycroft Mining Holding are associated (or correlated) with Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and Ivanhoe Electric go up and down completely randomly.

Pair Corralation between Hycroft Mining and Ivanhoe Electric

Assuming the 90 days horizon Hycroft Mining is expected to generate 1.37 times less return on investment than Ivanhoe Electric. In addition to that, Hycroft Mining is 2.33 times more volatile than Ivanhoe Electric. It trades about 0.05 of its total potential returns per unit of risk. Ivanhoe Electric is currently generating about 0.16 per unit of volatility. If you would invest  657.00  in Ivanhoe Electric on September 2, 2024 and sell it today you would earn a total of  294.00  from holding Ivanhoe Electric or generate 44.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Hycroft Mining Holding  vs.  Ivanhoe Electric

Hycroft Mining Holding

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hycroft Mining Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, Hycroft Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Ivanhoe Electric

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Electric are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Ivanhoe Electric exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hycroft Mining and Ivanhoe Electric

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

The idea behind Hycroft Mining Holding and Ivanhoe Electric 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.