Correlation Between Ivanhoe Energy and Conifex Timber
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Conifex Timber 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 Conifex Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Conifex Timber, you can compare the effects of market volatilities on Ivanhoe Energy and Conifex Timber 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 Conifex Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Conifex Timber.
Diversification Opportunities for Ivanhoe Energy and Conifex Timber
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ivanhoe and Conifex is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Conifex Timber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifex Timber 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 Conifex Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifex Timber has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Conifex Timber go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Conifex Timber
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.77 times more return on investment than Conifex Timber. However, Ivanhoe Energy is 1.29 times less risky than Conifex Timber. It trades about 0.0 of its potential returns per unit of risk. Conifex Timber is currently generating about -0.03 per unit of risk. If you would invest 1,799 in Ivanhoe Energy on September 1, 2024 and sell it today you would lose (469.00) from holding Ivanhoe Energy or give up 26.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Conifex Timber
Performance |
| Timeline |
| Ivanhoe Energy |
| Conifex Timber |
Ivanhoe Energy and Conifex Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Conifex Timber
The main advantage of trading using opposite Ivanhoe Energy and Conifex Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Conifex Timber 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 Conifex Timber will offset losses from the drop in Conifex Timber's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Conifex Timber vs. Western Forest Products | Conifex Timber vs. Interfor Corp | Conifex Timber vs. Canfor Pulp Products | Conifex Timber vs. Canfor |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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