Correlation Between Ivanhoe Energy and Standard Lithium
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Standard Lithium 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 Standard Lithium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Standard Lithium, you can compare the effects of market volatilities on Ivanhoe Energy and Standard Lithium 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 Standard Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Standard Lithium.
Diversification Opportunities for Ivanhoe Energy and Standard Lithium
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ivanhoe and Standard is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Standard Lithium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Lithium 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 Standard Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Lithium has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Standard Lithium go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Standard Lithium
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.57 times more return on investment than Standard Lithium. However, Ivanhoe Energy is 1.75 times less risky than Standard Lithium. It trades about -0.34 of its potential returns per unit of risk. Standard Lithium is currently generating about -0.26 per unit of risk. If you would invest 1,552 in Ivanhoe Energy on August 29, 2024 and sell it today you would lose (324.00) from holding Ivanhoe Energy or give up 20.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Standard Lithium
Performance |
| Timeline |
| Ivanhoe Energy |
| Standard Lithium |
Ivanhoe Energy and Standard Lithium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Standard Lithium
The main advantage of trading using opposite Ivanhoe Energy and Standard Lithium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Standard Lithium 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 Standard Lithium will offset losses from the drop in Standard Lithium's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited | Ivanhoe Energy vs. iShares Canadian HYBrid |
| Standard Lithium vs. First Majestic Silver | Standard Lithium vs. Ivanhoe Energy | Standard Lithium vs. Orezone Gold Corp | Standard Lithium 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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