Correlation Between Ivanhoe Energy and Stellar AfricaGold
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Stellar AfricaGold 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 Stellar AfricaGold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Stellar AfricaGold, you can compare the effects of market volatilities on Ivanhoe Energy and Stellar AfricaGold 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 Stellar AfricaGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Stellar AfricaGold.
Diversification Opportunities for Ivanhoe Energy and Stellar AfricaGold
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ivanhoe and Stellar is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Stellar AfricaGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellar AfricaGold 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 Stellar AfricaGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellar AfricaGold has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Stellar AfricaGold go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Stellar AfricaGold
Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Stellar AfricaGold. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 5.47 times less risky than Stellar AfricaGold. The stock trades about -0.19 of its potential returns per unit of risk. The Stellar AfricaGold is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Stellar AfricaGold on August 26, 2024 and sell it today you would earn a total of 1.00 from holding Stellar AfricaGold or generate 11.11% 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. Stellar AfricaGold
Performance |
| Timeline |
| Ivanhoe Energy |
| Stellar AfricaGold |
Ivanhoe Energy and Stellar AfricaGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Stellar AfricaGold
The main advantage of trading using opposite Ivanhoe Energy and Stellar AfricaGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Stellar AfricaGold 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 Stellar AfricaGold will offset losses from the drop in Stellar AfricaGold'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 |
| Stellar AfricaGold vs. Richmond Minerals | Stellar AfricaGold vs. Societe d Exploration | Stellar AfricaGold vs. Tesoro Minerals 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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