Correlation Between Ivanhoe Energy and Grande Portage
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Grande Portage 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 Grande Portage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Grande Portage Resources, you can compare the effects of market volatilities on Ivanhoe Energy and Grande Portage 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 Grande Portage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Grande Portage.
Diversification Opportunities for Ivanhoe Energy and Grande Portage
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Grande is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Grande Portage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Portage 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 Grande Portage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Portage Resources has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Grande Portage go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Grande Portage
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Grande Portage. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 1.76 times less risky than Grande Portage. The stock trades about -0.01 of its potential returns per unit of risk. The Grande Portage Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Grande Portage Resources on August 26, 2024 and sell it today you would earn a total of 3.00 from holding Grande Portage Resources or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Grande Portage Resources
Performance |
| Timeline |
| Ivanhoe Energy |
| Grande Portage Resources |
Ivanhoe Energy and Grande Portage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Grande Portage
The main advantage of trading using opposite Ivanhoe Energy and Grande Portage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Grande Portage 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 Grande Portage will offset losses from the drop in Grande Portage'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 |
| Grande Portage vs. First Majestic Silver | Grande Portage vs. Ivanhoe Energy | Grande Portage vs. Orezone Gold Corp | Grande Portage vs. Faraday Copper Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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