Correlation Between Ivanhoe Energy and K2 Gold
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and K2 Gold 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 K2 Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and K2 Gold, you can compare the effects of market volatilities on Ivanhoe Energy and K2 Gold 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 K2 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and K2 Gold.
Diversification Opportunities for Ivanhoe Energy and K2 Gold
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ivanhoe and KTO is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and K2 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K2 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 K2 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K2 Gold has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and K2 Gold go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and K2 Gold
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the K2 Gold. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 2.39 times less risky than K2 Gold. The stock trades about -0.19 of its potential returns per unit of risk. The K2 Gold is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13.00 in K2 Gold on August 31, 2024 and sell it today you would earn a total of 1.00 from holding K2 Gold or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. K2 Gold
Performance |
| Timeline |
| Ivanhoe Energy |
| K2 Gold |
Ivanhoe Energy and K2 Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and K2 Gold
The main advantage of trading using opposite Ivanhoe Energy and K2 Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, K2 Gold 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 K2 Gold will offset losses from the drop in K2 Gold's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
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