Correlation Between Ivanhoe Energy and Canfor
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Canfor 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 Canfor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Canfor, you can compare the effects of market volatilities on Ivanhoe Energy and Canfor 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 Canfor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Canfor.
Diversification Opportunities for Ivanhoe Energy and Canfor
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Canfor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor 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 Canfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Canfor go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Canfor
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Canfor. In addition to that, Ivanhoe Energy is 1.83 times more volatile than Canfor. It trades about -0.3 of its total potential returns per unit of risk. Canfor is currently generating about -0.19 per unit of volatility. If you would invest 1,588 in Canfor on November 7, 2024 and sell it today you would lose (92.00) from holding Canfor or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Canfor
Performance |
| Timeline |
| Ivanhoe Energy |
| Canfor |
Ivanhoe Energy and Canfor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Canfor
The main advantage of trading using opposite Ivanhoe Energy and Canfor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Canfor 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 Canfor will offset losses from the drop in Canfor's 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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