Correlation Between Ivanhoe Energy and Aclara Resources
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Aclara Resources 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 Aclara Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Aclara Resources, you can compare the effects of market volatilities on Ivanhoe Energy and Aclara Resources 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 Aclara Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Aclara Resources.
Diversification Opportunities for Ivanhoe Energy and Aclara Resources
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ivanhoe and Aclara is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Aclara Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclara Resources 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 Aclara Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclara Resources has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Aclara Resources go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Aclara Resources
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Aclara Resources. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 1.38 times less risky than Aclara Resources. The stock trades about -0.3 of its potential returns per unit of risk. The Aclara Resources is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Aclara Resources on November 1, 2024 and sell it today you would earn a total of 9.00 from holding Aclara Resources or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Aclara Resources
Performance |
| Timeline |
| Ivanhoe Energy |
| Aclara Resources |
Ivanhoe Energy and Aclara Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Aclara Resources
The main advantage of trading using opposite Ivanhoe Energy and Aclara Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Aclara Resources 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 Aclara Resources will offset losses from the drop in Aclara Resources' long position.| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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