Correlation Between Ivanhoe Energy and AbraSilver Resource
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and AbraSilver Resource 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 Energy and AbraSilver Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and AbraSilver Resource Corp, you can compare the effects of market volatilities on Ivanhoe Energy and AbraSilver Resource 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 Energy with a short position of AbraSilver Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and AbraSilver Resource.
Diversification Opportunities for Ivanhoe Energy and AbraSilver Resource
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ivanhoe and AbraSilver is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and AbraSilver Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbraSilver Resource Corp and Ivanhoe Energy 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 Energy are associated (or correlated) with AbraSilver Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbraSilver Resource Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and AbraSilver Resource go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and AbraSilver Resource
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 19.3 times less return on investment than AbraSilver Resource. But when comparing it to its historical volatility, Ivanhoe Energy is 1.08 times less risky than AbraSilver Resource. It trades about 0.0 of its potential returns per unit of risk. AbraSilver Resource Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 148.00 in AbraSilver Resource Corp on September 1, 2024 and sell it today you would earn a total of 124.00 from holding AbraSilver Resource Corp or generate 83.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. AbraSilver Resource Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| AbraSilver Resource Corp |
Ivanhoe Energy and AbraSilver Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and AbraSilver Resource
The main advantage of trading using opposite Ivanhoe Energy and AbraSilver Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, AbraSilver Resource 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 AbraSilver Resource will offset losses from the drop in AbraSilver Resource's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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