Correlation Between FPX Nickel and Ivanhoe Energy
Can any of the company-specific risk be diversified away by investing in both FPX Nickel 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 FPX Nickel and Ivanhoe Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPX Nickel Corp and Ivanhoe Energy, you can compare the effects of market volatilities on FPX Nickel 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 FPX Nickel with a short position of Ivanhoe Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPX Nickel and Ivanhoe Energy.
Diversification Opportunities for FPX Nickel and Ivanhoe Energy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between FPX and Ivanhoe is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding FPX Nickel Corp and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and FPX Nickel 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 FPX Nickel Corp 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 FPX Nickel i.e., FPX Nickel and Ivanhoe Energy go up and down completely randomly.
Pair Corralation between FPX Nickel and Ivanhoe Energy
Assuming the 90 days horizon FPX Nickel Corp is expected to under-perform the Ivanhoe Energy. But the stock apears to be less risky and, when comparing its historical volatility, FPX Nickel Corp is 1.06 times less risky than Ivanhoe Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Ivanhoe Energy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,421 in Ivanhoe Energy on August 26, 2024 and sell it today you would lose (71.00) from holding Ivanhoe Energy or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FPX Nickel Corp vs. Ivanhoe Energy
Performance |
| Timeline |
| FPX Nickel Corp |
| Ivanhoe Energy |
FPX Nickel and Ivanhoe Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPX Nickel and Ivanhoe Energy
The main advantage of trading using opposite FPX Nickel and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPX Nickel 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.| FPX Nickel vs. First Majestic Silver | FPX Nickel vs. Ivanhoe Energy | FPX Nickel vs. Orezone Gold Corp | FPX Nickel vs. Faraday Copper Corp |
| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited | Ivanhoe Energy vs. iShares Canadian HYBrid |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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