Correlation Between Ivanhoe Energy and SilverCrest Metals
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and SilverCrest Metals 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 SilverCrest Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and SilverCrest Metals, you can compare the effects of market volatilities on Ivanhoe Energy and SilverCrest Metals 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 SilverCrest Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and SilverCrest Metals.
Diversification Opportunities for Ivanhoe Energy and SilverCrest Metals
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ivanhoe and SilverCrest is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and SilverCrest Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverCrest Metals 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 SilverCrest Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverCrest Metals has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and SilverCrest Metals go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and SilverCrest Metals
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 3.33 times less return on investment than SilverCrest Metals. In addition to that, Ivanhoe Energy is 1.36 times more volatile than SilverCrest Metals. It trades about 0.02 of its total potential returns per unit of risk. SilverCrest Metals is currently generating about 0.11 per unit of volatility. If you would invest 750.00 in SilverCrest Metals on August 29, 2024 and sell it today you would earn a total of 655.00 from holding SilverCrest Metals or generate 87.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. SilverCrest Metals
Performance |
| Timeline |
| Ivanhoe Energy |
| SilverCrest Metals |
Ivanhoe Energy and SilverCrest Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and SilverCrest Metals
The main advantage of trading using opposite Ivanhoe Energy and SilverCrest Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, SilverCrest Metals 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 SilverCrest Metals will offset losses from the drop in SilverCrest Metals' long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| SilverCrest Metals vs. MAG Silver Corp | SilverCrest Metals vs. Pan American Silver | SilverCrest Metals vs. SSR Mining | SilverCrest Metals vs. Equinox Gold 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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