Correlation Between Ivanhoe Energy and Opus One
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Opus One 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 Opus One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Opus One Resources, you can compare the effects of market volatilities on Ivanhoe Energy and Opus One 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 Opus One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Opus One.
Diversification Opportunities for Ivanhoe Energy and Opus One
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Opus is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Opus One Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Opus One 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 Opus One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Opus One Resources has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Opus One go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Opus One
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 66.15 times less return on investment than Opus One. But when comparing it to its historical volatility, Ivanhoe Energy is 4.9 times less risky than Opus One. It trades about 0.01 of its potential returns per unit of risk. Opus One Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Opus One Resources on September 5, 2024 and sell it today you would earn a total of 4.00 from holding Opus One Resources or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ivanhoe Energy vs. Opus One Resources
Performance |
| Timeline |
| Ivanhoe Energy |
| Opus One Resources |
Ivanhoe Energy and Opus One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Opus One
The main advantage of trading using opposite Ivanhoe Energy and Opus One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Opus One 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 Opus One will offset losses from the drop in Opus One's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Opus One vs. First Majestic Silver | Opus One vs. Ivanhoe Energy | Opus One vs. Orezone Gold Corp | Opus One 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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