Correlation Between Ivanhoe Energy and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Equinox Gold 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 Equinox Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Equinox Gold Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Equinox Gold 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 Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Equinox Gold.
Diversification Opportunities for Ivanhoe Energy and Equinox Gold
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ivanhoe and Equinox is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Equinox Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinox Gold 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 Equinox Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinox Gold Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Equinox Gold go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Equinox Gold
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 1.12 times more return on investment than Equinox Gold. However, Ivanhoe Energy is 1.12 times more volatile than Equinox Gold Corp. It trades about 0.16 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 948.00 in Ivanhoe Energy on August 28, 2024 and sell it today you would earn a total of 385.00 from holding Ivanhoe Energy or generate 40.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Equinox Gold Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| Equinox Gold Corp |
Ivanhoe Energy and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Equinox Gold
The main advantage of trading using opposite Ivanhoe Energy and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Equinox Gold 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 Equinox Gold will offset losses from the drop in Equinox Gold's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited | Ivanhoe Energy vs. iShares Canadian HYBrid |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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