Correlation Between Ivanhoe Energy and Northcliff Resources
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Northcliff 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 Northcliff 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 Northcliff Resources, you can compare the effects of market volatilities on Ivanhoe Energy and Northcliff 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 Northcliff Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Northcliff Resources.
Diversification Opportunities for Ivanhoe Energy and Northcliff Resources
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Northcliff is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Northcliff Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northcliff 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 Northcliff Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northcliff Resources has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Northcliff Resources go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Northcliff Resources
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 10.35 times less return on investment than Northcliff Resources. But when comparing it to its historical volatility, Ivanhoe Energy is 2.73 times less risky than Northcliff Resources. It trades about 0.01 of its potential returns per unit of risk. Northcliff Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Northcliff Resources on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Northcliff Resources or generate 0.0% 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. Northcliff Resources
Performance |
| Timeline |
| Ivanhoe Energy |
| Northcliff Resources |
Ivanhoe Energy and Northcliff Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Northcliff Resources
The main advantage of trading using opposite Ivanhoe Energy and Northcliff Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Northcliff 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 Northcliff Resources will offset losses from the drop in Northcliff Resources' long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Northcliff Resources vs. New Destiny Mining | Northcliff Resources vs. Black Widow Resources | Northcliff Resources vs. Magnum Goldcorp |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |