Correlation Between Ivanhoe Mines and IDEX Metals

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Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines and IDEX Metals 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 IDEX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Mines and IDEX Metals Corp, you can compare the effects of market volatilities on Ivanhoe Mines and IDEX Metals 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 IDEX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and IDEX Metals.

Diversification Opportunities for Ivanhoe Mines and IDEX Metals

0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between Ivanhoe and IDEX is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines and IDEX Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IDEX Metals 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 IDEX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IDEX Metals Corp has no effect on the direction of Ivanhoe Mines i.e., Ivanhoe Mines and IDEX Metals go up and down completely randomly.

Pair Corralation between Ivanhoe Mines and IDEX Metals

Assuming the 90 days trading horizon Ivanhoe Mines is expected to under-perform the IDEX Metals. In addition to that, Ivanhoe Mines is 1.26 times more volatile than IDEX Metals Corp. It trades about -0.01 of its total potential returns per unit of risk. IDEX Metals Corp is currently generating about -0.01 per unit of volatility. If you would invest  49.00  in IDEX Metals Corp on April 20, 2025 and sell it today you would lose (1.00) from holding IDEX Metals Corp or give up 2.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy44.44%
ValuesDaily Returns

Ivanhoe Mines  vs.  IDEX Metals Corp

 Performance 
       Timeline  
Ivanhoe Mines 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ivanhoe Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ivanhoe Mines is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
IDEX Metals Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days IDEX Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, IDEX Metals is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ivanhoe Mines and IDEX Metals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ivanhoe Mines and IDEX Metals

The main advantage of trading using opposite Ivanhoe Mines and IDEX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines position performs unexpectedly, IDEX Metals 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 IDEX Metals will offset losses from the drop in IDEX Metals' long position.
The idea behind Ivanhoe Mines and IDEX Metals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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