Correlation Between Hongli Group and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both Hongli Group 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 Hongli Group and Ivanhoe Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hongli Group Ordinary and Ivanhoe Electric, you can compare the effects of market volatilities on Hongli Group 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 Hongli Group with a short position of Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongli Group and Ivanhoe Electric.
Diversification Opportunities for Hongli Group and Ivanhoe Electric
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hongli and Ivanhoe is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Hongli Group Ordinary and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and Hongli Group 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 Hongli Group Ordinary 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 Hongli Group i.e., Hongli Group and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between Hongli Group and Ivanhoe Electric
Considering the 90-day investment horizon Hongli Group Ordinary is expected to generate 1.47 times more return on investment than Ivanhoe Electric. However, Hongli Group is 1.47 times more volatile than Ivanhoe Electric. It trades about 0.12 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.21 per unit of risk. If you would invest 113.00 in Hongli Group Ordinary on August 30, 2024 and sell it today you would earn a total of 13.00 from holding Hongli Group Ordinary or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hongli Group Ordinary vs. Ivanhoe Electric
Performance |
| Timeline |
| Hongli Group Ordinary |
| Ivanhoe Electric |
Hongli Group and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongli Group and Ivanhoe Electric
The main advantage of trading using opposite Hongli Group and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongli Group 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.| Hongli Group vs. Reliance Steel Aluminum | Hongli Group vs. Ternium SA ADR | Hongli Group vs. Worthington Steel | Hongli Group vs. Cleveland Cliffs |
| Ivanhoe Electric vs. Primoris Services | Ivanhoe Electric vs. Jacobs Solutions | Ivanhoe Electric vs. Newpark Resources | Ivanhoe Electric vs. Paiute Oil Mining |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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