Correlation Between Ivanhoe Mines and Calibre Mining

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

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

Diversification Opportunities for Ivanhoe Mines and Calibre Mining

0.63

Correlation Coefficient

Ivanhoe Mines  Calibre Mining

Poor diversification

The 3 months correlation between Ivanhoe and Calibre is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp and Ivanhoe Mines 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 Mines are associated (or correlated) with Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and Calibre Mining go up and down completely randomly.

Pair Corralation between Ivanhoe Mines and Calibre Mining

Assuming the 90 days trading horizon Ivanhoe Mines is expected to generate 1.06 times more return on investment than Calibre Mining. However, Ivanhoe Mines is 1.06 times more volatile than Calibre Mining Corp. It trades about 0.09 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.06 per unit of risk. If you would invest  1,626  in Ivanhoe Mines on September 4, 2024 and sell it today you would earn a total of  245.00  from holding Ivanhoe Mines or generate 15.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ivanhoe Mines  vs.  Calibre Mining Corp

Ivanhoe Mines

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Mines are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ivanhoe Mines displayed solid returns over the last few months and may actually be approaching a breakup point.

Calibre Mining Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Calibre Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ivanhoe Mines and Calibre Mining

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

The idea behind Ivanhoe Mines and Calibre Mining Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.