Correlation Between Ivanhoe Energy and Lithium South
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Lithium South 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 Lithium South into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Lithium South Development, you can compare the effects of market volatilities on Ivanhoe Energy and Lithium South 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 Lithium South. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Lithium South.
Diversification Opportunities for Ivanhoe Energy and Lithium South
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ivanhoe and Lithium is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Lithium South Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithium South Development 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 Lithium South. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithium South Development has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Lithium South go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Lithium South
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.73 times more return on investment than Lithium South. However, Ivanhoe Energy is 1.37 times less risky than Lithium South. It trades about 0.01 of its potential returns per unit of risk. Lithium South Development is currently generating about -0.03 per unit of risk. If you would invest 1,647 in Ivanhoe Energy on September 5, 2024 and sell it today you would lose (370.00) from holding Ivanhoe Energy or give up 22.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Lithium South Development
Performance |
| Timeline |
| Ivanhoe Energy |
| Lithium South Development |
Ivanhoe Energy and Lithium South Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Lithium South
The main advantage of trading using opposite Ivanhoe Energy and Lithium South positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Lithium South 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 Lithium South will offset losses from the drop in Lithium South's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Lithium South vs. Lithium Chile | Lithium South vs. Frontier Lithium | Lithium South vs. Argentina Lithium Energy | Lithium South vs. Critical Elements |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets |