Correlation Between Flinders Resources and Ivanhoe Energy
Can any of the company-specific risk be diversified away by investing in both Flinders Resources and Ivanhoe Energy 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 Flinders Resources and Ivanhoe Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flinders Resources Limited and Ivanhoe Energy, you can compare the effects of market volatilities on Flinders Resources and Ivanhoe Energy 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 Flinders Resources with a short position of Ivanhoe Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flinders Resources and Ivanhoe Energy.
Diversification Opportunities for Flinders Resources and Ivanhoe Energy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flinders and Ivanhoe is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Flinders Resources Limited and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and Flinders 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 Flinders Resources Limited are associated (or correlated) with Ivanhoe Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Energy has no effect on the direction of Flinders Resources i.e., Flinders Resources and Ivanhoe Energy go up and down completely randomly.
Pair Corralation between Flinders Resources and Ivanhoe Energy
Assuming the 90 days horizon Flinders Resources Limited is expected to generate 1.26 times more return on investment than Ivanhoe Energy. However, Flinders Resources is 1.26 times more volatile than Ivanhoe Energy. It trades about 0.35 of its potential returns per unit of risk. Ivanhoe Energy is currently generating about -0.21 per unit of risk. If you would invest 433.00 in Flinders Resources Limited on October 11, 2024 and sell it today you would earn a total of 156.00 from holding Flinders Resources Limited or generate 36.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flinders Resources Limited vs. Ivanhoe Energy
Performance |
| Timeline |
| Flinders Resources |
| Ivanhoe Energy |
Flinders Resources and Ivanhoe Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flinders Resources and Ivanhoe Energy
The main advantage of trading using opposite Flinders Resources and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flinders Resources position performs unexpectedly, Ivanhoe Energy 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 Energy will offset losses from the drop in Ivanhoe Energy's long position.| Flinders Resources vs. CVS HEALTH CDR | Flinders Resources vs. Canlan Ice Sports | Flinders Resources vs. TUT Fitness Group | Flinders Resources vs. Jamieson Wellness |
| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
Check out your portfolio center.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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