Correlation Between Ivanhoe Energy and Interfor Corp
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Interfor Corp 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 Interfor Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Interfor Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Interfor Corp 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 Interfor Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Interfor Corp.
Diversification Opportunities for Ivanhoe Energy and Interfor Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ivanhoe and Interfor is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Interfor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interfor 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 Interfor Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interfor Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Interfor Corp go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Interfor Corp
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 1.58 times more return on investment than Interfor Corp. However, Ivanhoe Energy is 1.58 times more volatile than Interfor Corp. It trades about 0.01 of its potential returns per unit of risk. Interfor Corp is currently generating about 0.0 per unit of risk. If you would invest 1,440 in Ivanhoe Energy on August 29, 2024 and sell it today you would lose (212.00) from holding Ivanhoe Energy or give up 14.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Interfor Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| Interfor Corp |
Ivanhoe Energy and Interfor Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Interfor Corp
The main advantage of trading using opposite Ivanhoe Energy and Interfor Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Interfor Corp 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 Interfor Corp will offset losses from the drop in Interfor Corp's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Interfor Corp vs. Canfor | Interfor Corp vs. West Fraser Timber | Interfor Corp vs. Western Forest Products | Interfor Corp vs. Stella Jones |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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