Correlation Between Ivanhoe Energy and Ero Copper
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Ero Copper 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 Ero Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Ero Copper Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Ero Copper 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 Ero Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Ero Copper.
Diversification Opportunities for Ivanhoe Energy and Ero Copper
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ivanhoe and Ero is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Ero Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ero Copper 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 Ero Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ero Copper Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Ero Copper go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Ero Copper
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 1.62 times more return on investment than Ero Copper. However, Ivanhoe Energy is 1.62 times more volatile than Ero Copper Corp. It trades about -0.01 of its potential returns per unit of risk. Ero Copper Corp is currently generating about -0.07 per unit of risk. If you would invest 1,603 in Ivanhoe Energy on August 28, 2024 and sell it today you would lose (270.00) from holding Ivanhoe Energy or give up 16.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Ero Copper Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| Ero Copper Corp |
Ivanhoe Energy and Ero Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Ero Copper
The main advantage of trading using opposite Ivanhoe Energy and Ero Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Ero Copper 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 Ero Copper will offset losses from the drop in Ero Copper'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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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