Correlation Between Ivanhoe Energy and Chatham Rock
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Chatham Rock 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 Chatham Rock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Chatham Rock Phosphate, you can compare the effects of market volatilities on Ivanhoe Energy and Chatham Rock 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 Chatham Rock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Chatham Rock.
Diversification Opportunities for Ivanhoe Energy and Chatham Rock
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ivanhoe and Chatham is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Chatham Rock Phosphate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chatham Rock Phosphate 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 Chatham Rock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chatham Rock Phosphate has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Chatham Rock go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Chatham Rock
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.32 times more return on investment than Chatham Rock. However, Ivanhoe Energy is 3.14 times less risky than Chatham Rock. It trades about 0.12 of its potential returns per unit of risk. Chatham Rock Phosphate is currently generating about -0.02 per unit of risk. If you would invest 1,177 in Ivanhoe Energy on August 28, 2024 and sell it today you would earn a total of 156.00 from holding Ivanhoe Energy or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Chatham Rock Phosphate
Performance |
| Timeline |
| Ivanhoe Energy |
| Chatham Rock Phosphate |
Ivanhoe Energy and Chatham Rock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Chatham Rock
The main advantage of trading using opposite Ivanhoe Energy and Chatham Rock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Chatham Rock 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 Chatham Rock will offset losses from the drop in Chatham Rock's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited | Ivanhoe Energy vs. iShares Canadian HYBrid |
| Chatham Rock vs. First Majestic Silver | Chatham Rock vs. Ivanhoe Energy | Chatham Rock vs. Orezone Gold Corp | Chatham Rock vs. Faraday Copper Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |