Correlation Between Ivanhoe Energy and Palamina Corp
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Palamina Corp 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 Palamina Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Palamina Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Palamina Corp 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 Palamina Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Palamina Corp.
Diversification Opportunities for Ivanhoe Energy and Palamina Corp
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Palamina is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Palamina Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palamina Corp 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 Palamina Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palamina Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Palamina Corp go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Palamina Corp
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Palamina Corp. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 1.45 times less risky than Palamina Corp. The stock trades about -0.22 of its potential returns per unit of risk. The Palamina Corp is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Palamina Corp on October 25, 2024 and sell it today you would lose (3.00) from holding Palamina Corp or give up 23.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Palamina Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| Palamina Corp |
Ivanhoe Energy and Palamina Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Palamina Corp
The main advantage of trading using opposite Ivanhoe Energy and Palamina Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Palamina Corp 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 Palamina Corp will offset losses from the drop in Palamina Corp'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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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