Correlation Between Ivanhoe Electric and Dow
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric and Dow 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 Electric and Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and Dow Inc, you can compare the effects of market volatilities on Ivanhoe Electric and Dow 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 Electric with a short position of Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and Dow.
Diversification Opportunities for Ivanhoe Electric and Dow
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ivanhoe and Dow is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Dow Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Inc and Ivanhoe Electric 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 Electric are associated (or correlated) with Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Inc has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Dow go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and Dow
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to generate 2.05 times more return on investment than Dow. However, Ivanhoe Electric is 2.05 times more volatile than Dow Inc. It trades about -0.14 of its potential returns per unit of risk. Dow Inc is currently generating about -0.43 per unit of risk. If you would invest 1,060 in Ivanhoe Electric on August 23, 2024 and sell it today you would lose (111.00) from holding Ivanhoe Electric or give up 10.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Electric vs. Dow Inc
Performance |
| Timeline |
| Ivanhoe Electric |
| Dow Inc |
Ivanhoe Electric and Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Electric and Dow
The main advantage of trading using opposite Ivanhoe Electric and Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric position performs unexpectedly, Dow 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 Dow will offset losses from the drop in Dow's long position.| Ivanhoe Electric vs. Apogee Enterprises | Ivanhoe Electric vs. SmartStop Self Storage | Ivanhoe Electric vs. Mesa Air Group | Ivanhoe Electric vs. Nextplat 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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