Correlation Between Ivanhoe Energy and Highway 50
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Highway 50 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 Highway 50 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Highway 50 Gold, you can compare the effects of market volatilities on Ivanhoe Energy and Highway 50 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 Highway 50. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Highway 50.
Diversification Opportunities for Ivanhoe Energy and Highway 50
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Highway is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Highway 50 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 50 Gold 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 Highway 50. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway 50 Gold has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Highway 50 go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Highway 50
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 5.77 times less return on investment than Highway 50. But when comparing it to its historical volatility, Ivanhoe Energy is 1.63 times less risky than Highway 50. It trades about 0.02 of its potential returns per unit of risk. Highway 50 Gold is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Highway 50 Gold on August 25, 2024 and sell it today you would earn a total of 10.00 from holding Highway 50 Gold or generate 100.0% 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. Highway 50 Gold
Performance |
| Timeline |
| Ivanhoe Energy |
| Highway 50 Gold |
Ivanhoe Energy and Highway 50 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Highway 50
The main advantage of trading using opposite Ivanhoe Energy and Highway 50 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Highway 50 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 Highway 50 will offset losses from the drop in Highway 50'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 |
| Highway 50 vs. First Majestic Silver | Highway 50 vs. Ivanhoe Energy | Highway 50 vs. Orezone Gold Corp | Highway 50 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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