Correlation Between Ivanhoe Energy and Avrupa Minerals
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Avrupa Minerals 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 Avrupa Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Avrupa Minerals, you can compare the effects of market volatilities on Ivanhoe Energy and Avrupa Minerals 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 Avrupa Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Avrupa Minerals.
Diversification Opportunities for Ivanhoe Energy and Avrupa Minerals
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ivanhoe and Avrupa is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Avrupa Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avrupa Minerals 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 Avrupa Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avrupa Minerals has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Avrupa Minerals go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Avrupa Minerals
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Avrupa Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 2.64 times less risky than Avrupa Minerals. The stock trades about -0.34 of its potential returns per unit of risk. The Avrupa Minerals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Avrupa Minerals on August 29, 2024 and sell it today you would earn a total of 0.50 from holding Avrupa Minerals or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ivanhoe Energy vs. Avrupa Minerals
Performance |
| Timeline |
| Ivanhoe Energy |
| Avrupa Minerals |
Ivanhoe Energy and Avrupa Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Avrupa Minerals
The main advantage of trading using opposite Ivanhoe Energy and Avrupa Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Avrupa Minerals 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 Avrupa Minerals will offset losses from the drop in Avrupa Minerals' long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Avrupa Minerals vs. First Majestic Silver | Avrupa Minerals vs. Ivanhoe Energy | Avrupa Minerals vs. Orezone Gold Corp | Avrupa Minerals 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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