Correlation Between Ivanhoe Energy and Loncor Resources
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Loncor Resources 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 Loncor Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Loncor Resources, you can compare the effects of market volatilities on Ivanhoe Energy and Loncor Resources 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 Loncor Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Loncor Resources.
Diversification Opportunities for Ivanhoe Energy and Loncor Resources
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ivanhoe and Loncor is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Loncor Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loncor Resources 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 Loncor Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loncor Resources has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Loncor Resources go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Loncor Resources
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 27.75 times less return on investment than Loncor Resources. In addition to that, Ivanhoe Energy is 1.15 times more volatile than Loncor Resources. It trades about 0.0 of its total potential returns per unit of risk. Loncor Resources is currently generating about 0.05 per unit of volatility. If you would invest 39.00 in Loncor Resources on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Loncor Resources or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Loncor Resources
Performance |
| Timeline |
| Ivanhoe Energy |
| Loncor Resources |
Ivanhoe Energy and Loncor Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Loncor Resources
The main advantage of trading using opposite Ivanhoe Energy and Loncor Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Loncor Resources 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 Loncor Resources will offset losses from the drop in Loncor Resources' long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Loncor Resources vs. Algoma Steel Group | Loncor Resources vs. Champion Iron | Loncor Resources vs. International Zeolite Corp | Loncor Resources vs. European Residential Real |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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