Correlation Between Ivanhoe Energy and New Gold
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and New 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 New 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 New Gold, you can compare the effects of market volatilities on Ivanhoe Energy and New 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 New Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and New Gold.
Diversification Opportunities for Ivanhoe Energy and New Gold
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ivanhoe and New is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and New Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New 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 New Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Gold has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and New Gold go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and New Gold
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 4.64 times less return on investment than New Gold. In addition to that, Ivanhoe Energy is 1.17 times more volatile than New Gold. It trades about 0.01 of its total potential returns per unit of risk. New Gold is currently generating about 0.08 per unit of volatility. If you would invest 142.00 in New Gold on September 2, 2024 and sell it today you would earn a total of 248.00 from holding New Gold or generate 174.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. New Gold
Performance |
| Timeline |
| Ivanhoe Energy |
| New Gold |
Ivanhoe Energy and New Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and New Gold
The main advantage of trading using opposite Ivanhoe Energy and New Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, New 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 New Gold will offset losses from the drop in New 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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