Correlation Between Ivanhoe Energy and Soma Gold
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Soma Gold 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 Soma Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Soma Gold Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Soma Gold 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 Soma Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Soma Gold.
Diversification Opportunities for Ivanhoe Energy and Soma Gold
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Soma is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Soma Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soma Gold 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 Soma Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soma Gold Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Soma Gold go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Soma Gold
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Soma Gold. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 1.02 times less risky than Soma Gold. The stock trades about -0.27 of its potential returns per unit of risk. The Soma Gold Corp is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 63.00 in Soma Gold Corp on September 21, 2024 and sell it today you would lose (9.00) from holding Soma Gold Corp or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ivanhoe Energy vs. Soma Gold Corp
Performance |
| Timeline |
| Ivanhoe Energy |
| Soma Gold Corp |
Ivanhoe Energy and Soma Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Soma Gold
The main advantage of trading using opposite Ivanhoe Energy and Soma Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Soma Gold 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 Soma Gold will offset losses from the drop in Soma Gold's long position.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| Soma Gold vs. Revival Gold | Soma Gold vs. Outcrop Gold Corp | Soma Gold vs. Scottie Resources Corp | Soma Gold vs. Royal Road Minerals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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