Correlation Between Ivanhoe Energy and Imperial Metals
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Imperial Metals 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 Imperial Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Imperial Metals, you can compare the effects of market volatilities on Ivanhoe Energy and Imperial Metals 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 Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Imperial Metals.
Diversification Opportunities for Ivanhoe Energy and Imperial Metals
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Imperial is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Metals 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 Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Imperial Metals go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Imperial Metals
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Imperial Metals. In addition to that, Ivanhoe Energy is 1.53 times more volatile than Imperial Metals. It trades about -0.39 of its total potential returns per unit of risk. Imperial Metals is currently generating about 0.1 per unit of volatility. If you would invest 191.00 in Imperial Metals on November 3, 2024 and sell it today you would earn a total of 8.00 from holding Imperial Metals or generate 4.19% 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. Imperial Metals
Performance |
| Timeline |
| Ivanhoe Energy |
| Imperial Metals |
Ivanhoe Energy and Imperial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Imperial Metals
The main advantage of trading using opposite Ivanhoe Energy and Imperial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Imperial Metals 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 Imperial Metals will offset losses from the drop in Imperial Metals' long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited | Ivanhoe Energy vs. iShares Canadian HYBrid |
| Imperial Metals vs. Taseko Mines | Imperial Metals vs. Mountain Boy Minerals | Imperial Metals vs. iMetal Resources | Imperial Metals vs. Western Copper and |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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