Correlation Between Ivanhoe Energy and Power Nickel
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Power Nickel 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 Power Nickel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Power Nickel, you can compare the effects of market volatilities on Ivanhoe Energy and Power Nickel 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 Power Nickel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Power Nickel.
Diversification Opportunities for Ivanhoe Energy and Power Nickel
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Power is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Power Nickel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Nickel 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 Power Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Nickel has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Power Nickel go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Power Nickel
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 11.16 times less return on investment than Power Nickel. But when comparing it to its historical volatility, Ivanhoe Energy is 1.23 times less risky than Power Nickel. It trades about 0.01 of its potential returns per unit of risk. Power Nickel is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Power Nickel on September 3, 2024 and sell it today you would earn a total of 52.00 from holding Power Nickel or generate 226.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Power Nickel
Performance |
| Timeline |
| Ivanhoe Energy |
| Power Nickel |
Ivanhoe Energy and Power Nickel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Power Nickel
The main advantage of trading using opposite Ivanhoe Energy and Power Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Power Nickel 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 Power Nickel will offset losses from the drop in Power Nickel's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Power Nickel vs. Magna Mining | Power Nickel vs. SPC Nickel Corp | Power Nickel vs. Grid Metals Corp | Power Nickel vs. Flying Nickel Mining |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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