Correlation Between Ivanhoe Energy and Alliance Mining
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Alliance Mining 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 Alliance Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Alliance Mining Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Alliance Mining 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 Alliance Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Alliance Mining.
Diversification Opportunities for Ivanhoe Energy and Alliance Mining
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ivanhoe and Alliance is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Alliance Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Mining 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 Alliance Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Mining Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Alliance Mining go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Alliance Mining
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 8.6 times less return on investment than Alliance Mining. But when comparing it to its historical volatility, Ivanhoe Energy is 1.95 times less risky than Alliance Mining. It trades about 0.01 of its potential returns per unit of risk. Alliance Mining Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Alliance Mining Corp on August 26, 2024 and sell it today you would lose (2.00) from holding Alliance Mining Corp or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.75% |
| Values | Daily Returns |
Ivanhoe Energy vs. Alliance Mining Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| Alliance Mining Corp |
Ivanhoe Energy and Alliance Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Alliance Mining
The main advantage of trading using opposite Ivanhoe Energy and Alliance Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Alliance Mining 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 Alliance Mining will offset losses from the drop in Alliance Mining's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited | Ivanhoe Energy vs. iShares Canadian HYBrid |
| Alliance Mining vs. First Majestic Silver | Alliance Mining vs. Ivanhoe Energy | Alliance Mining vs. Orezone Gold Corp | Alliance Mining vs. Faraday Copper Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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