Correlation Between Pinterest and Ivanhoe Electric

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

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

Diversification Opportunities for Pinterest and Ivanhoe Electric

0.35

Correlation Coefficient

Pinterest  Ivanhoe Electric

Weak diversification

The 3 months correlation between Pinterest and Ivanhoe is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and Ivanhoe Electric go up and down completely randomly.

Pair Corralation between Pinterest and Ivanhoe Electric

Given the investment horizon of 90 days Pinterest is expected to generate 10.23 times less return on investment than Ivanhoe Electric. But when comparing it to its historical volatility, Pinterest is 1.6 times less risky than Ivanhoe Electric. It trades about 0.02 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  646.00  in Ivanhoe Electric on September 5, 2024 and sell it today you would earn a total of  261.00  from holding Ivanhoe Electric or generate 40.4% return on investment over 90 days.

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

Pinterest  vs.  Ivanhoe Electric

Pinterest

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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 conflicting 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 Pinterest and Ivanhoe Electric

The main advantage of trading using opposite Pinterest and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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 Pinterest 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.