Correlation Between Ivanhoe Energy and T2 Metals

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Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and T2 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 T2 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 T2 Metals Corp, you can compare the effects of market volatilities on Ivanhoe Energy and T2 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 T2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and T2 Metals.

Diversification Opportunities for Ivanhoe Energy and T2 Metals

IvanhoeTWODiversified AwayIvanhoeTWODiversified Away100%
0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Ivanhoe and TWO is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and T2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Metals 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 T2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Metals Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and T2 Metals go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and T2 Metals

Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.43 times more return on investment than T2 Metals. However, Ivanhoe Energy is 2.31 times less risky than T2 Metals. It trades about -0.04 of its potential returns per unit of risk. T2 Metals Corp is currently generating about -0.02 per unit of risk. If you would invest  876.00  in Ivanhoe Energy on November 30, 2024 and sell it today you would lose (34.00) from holding Ivanhoe Energy or give up 3.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Ivanhoe Energy  vs.  T2 Metals Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -40-30-20-100
JavaScript chart by amCharts 3.21.15IE TWO
       Timeline  
Ivanhoe Energy 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ivanhoe Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8910111213
T2 Metals Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days T2 Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in March 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.160.180.20.220.240.260.28

Ivanhoe Energy and T2 Metals Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.33-4.74-3.15-1.56-0.02651.312.643.975.3 0.0100.0150.0200.0250.030
JavaScript chart by amCharts 3.21.15IE TWO
       Returns  

Pair Trading with Ivanhoe Energy and T2 Metals

The main advantage of trading using opposite Ivanhoe Energy and T2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, T2 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 T2 Metals will offset losses from the drop in T2 Metals' long position.
The idea behind Ivanhoe Energy and T2 Metals Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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