Correlation Between Ivanhoe Energy and Pacific Ridge
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Pacific Ridge 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 Pacific Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Pacific Ridge Exploration, you can compare the effects of market volatilities on Ivanhoe Energy and Pacific Ridge 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 Pacific Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Pacific Ridge.
Diversification Opportunities for Ivanhoe Energy and Pacific Ridge
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ivanhoe and Pacific is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Pacific Ridge Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Ridge Exploration 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 Pacific Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Ridge Exploration has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Pacific Ridge go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Pacific Ridge
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.42 times more return on investment than Pacific Ridge. However, Ivanhoe Energy is 2.36 times less risky than Pacific Ridge. It trades about 0.01 of its potential returns per unit of risk. Pacific Ridge Exploration is currently generating about -0.02 per unit of risk. If you would invest 1,381 in Ivanhoe Energy on September 4, 2024 and sell it today you would lose (104.00) from holding Ivanhoe Energy or give up 7.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Pacific Ridge Exploration
Performance |
| Timeline |
| Ivanhoe Energy |
| Pacific Ridge Exploration |
Ivanhoe Energy and Pacific Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Pacific Ridge
The main advantage of trading using opposite Ivanhoe Energy and Pacific Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Pacific Ridge 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 Pacific Ridge will offset losses from the drop in Pacific Ridge's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Pacific Ridge vs. Commander Resources | Pacific Ridge vs. Galantas Gold Corp | Pacific Ridge vs. Grande Portage Resources | Pacific Ridge vs. Wescan Goldfields |
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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