Correlation Between Ivanhoe Energy and Hercules Metals
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Hercules Metals 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 Hercules Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Hercules Metals Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Hercules Metals 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 Hercules Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Hercules Metals.
Diversification Opportunities for Ivanhoe Energy and Hercules Metals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ivanhoe and Hercules is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Hercules Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Metals 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 Hercules Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Metals Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Hercules Metals go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Hercules Metals
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Hercules Metals. In addition to that, Ivanhoe Energy is 1.11 times more volatile than Hercules Metals Corp. It trades about -0.39 of its total potential returns per unit of risk. Hercules Metals Corp is currently generating about 0.07 per unit of volatility. If you would invest 58.00 in Hercules Metals Corp on November 2, 2024 and sell it today you would earn a total of 2.00 from holding Hercules Metals Corp or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ivanhoe Energy vs. Hercules Metals Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| Hercules Metals Corp |
Ivanhoe Energy and Hercules Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Hercules Metals
The main advantage of trading using opposite Ivanhoe Energy and Hercules Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Hercules Metals 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 Hercules Metals will offset losses from the drop in Hercules Metals' long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Hercules Metals vs. National Bank of | Hercules Metals vs. Manulife Financial Corp | Hercules Metals vs. Income Financial Trust | Hercules Metals vs. BluMetric Environmental |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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