Correlation Between Ivanhoe Electric and Nutrien
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Electric and Nutrien 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 Nutrien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Electric and Nutrien, you can compare the effects of market volatilities on Ivanhoe Electric and Nutrien 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 Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and Nutrien.
Diversification Opportunities for Ivanhoe Electric and Nutrien
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ivanhoe and Nutrien is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien 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 Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Nutrien go up and down completely randomly.
Pair Corralation between Ivanhoe Electric and Nutrien
Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Nutrien. In addition to that, Ivanhoe Electric is 1.12 times more volatile than Nutrien. It trades about -0.38 of its total potential returns per unit of risk. Nutrien is currently generating about 0.12 per unit of volatility. If you would invest 4,824 in Nutrien on November 8, 2024 and sell it today you would earn a total of 226.00 from holding Nutrien or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Electric vs. Nutrien
Performance |
| Timeline |
| Ivanhoe Electric |
| Nutrien |
Ivanhoe Electric and Nutrien Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Electric and Nutrien
The main advantage of trading using opposite Ivanhoe Electric and Nutrien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric position performs unexpectedly, Nutrien 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 Nutrien will offset losses from the drop in Nutrien's long position.| Ivanhoe Electric vs. 51Talk Online Education | Ivanhoe Electric vs. Treasury Wine Estates | Ivanhoe Electric vs. Willamette Valley Vineyards | Ivanhoe Electric vs. Elite Education Group |
| Nutrien vs. CF Industries Holdings | Nutrien vs. Enlightify | Nutrien vs. American Vanguard | Nutrien vs. FMC Corporation |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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