Correlation Between Ivanhoe Energy and Eagle Plains
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Eagle Plains 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 Eagle Plains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Eagle Plains Resources, you can compare the effects of market volatilities on Ivanhoe Energy and Eagle Plains 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 Eagle Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Eagle Plains.
Diversification Opportunities for Ivanhoe Energy and Eagle Plains
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ivanhoe and Eagle is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Eagle Plains Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Plains 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 Eagle Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Plains Resources has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Eagle Plains go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Eagle Plains
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Eagle Plains. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 1.68 times less risky than Eagle Plains. The stock trades about -0.2 of its potential returns per unit of risk. The Eagle Plains Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Eagle Plains Resources on September 5, 2024 and sell it today you would earn a total of 1.00 from holding Eagle Plains Resources or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Eagle Plains Resources
Performance |
| Timeline |
| Ivanhoe Energy |
| Eagle Plains Resources |
Ivanhoe Energy and Eagle Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Eagle Plains
The main advantage of trading using opposite Ivanhoe Energy and Eagle Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Eagle Plains 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 Eagle Plains will offset losses from the drop in Eagle Plains' long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Eagle Plains vs. Commander Resources | Eagle Plains vs. Radius Gold | Eagle Plains vs. Fjordland Exploration | Eagle Plains vs. Bitterroot Resources |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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