Correlation Between Alphamin Resources and Ivanhoe Mines

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

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

Diversification Opportunities for Alphamin Resources and Ivanhoe Mines

0.19

Correlation Coefficient

Alphamin Resources  Ivanhoe Mines

Average diversification

The 3 months correlation between Alphamin and Ivanhoe is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Alphamin Resources Corp and Ivanhoe Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Mines and Alphamin Resources 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 Alphamin Resources Corp are associated (or correlated) with Ivanhoe Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Mines has no effect on the direction of Alphamin Resources i.e., Alphamin Resources and Ivanhoe Mines go up and down completely randomly.

Pair Corralation between Alphamin Resources and Ivanhoe Mines

Assuming the 90 days horizon Alphamin Resources Corp is expected to under-perform the Ivanhoe Mines. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alphamin Resources Corp is 1.44 times less risky than Ivanhoe Mines. The pink sheet trades about -0.36 of its potential returns per unit of risk. The Ivanhoe Mines is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest  1,365  in Ivanhoe Mines on September 24, 2024 and sell it today you would lose (159.00) from holding Ivanhoe Mines or give up 11.65% of portfolio value over 90 days.

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

Alphamin Resources Corp  vs.  Ivanhoe Mines

Alphamin Resources Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alphamin Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, Alphamin Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ivanhoe Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivanhoe Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Alphamin Resources and Ivanhoe Mines

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

The idea behind Alphamin Resources Corp and Ivanhoe Mines 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.