Correlation Between Ivy Apollo and Ivy Energy
Can any of the company-specific risk be diversified away by investing in both Ivy Apollo and Ivy Energy 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 Ivy Apollo and Ivy Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivy Apollo Multi Asset and Ivy Energy Fund, you can compare the effects of market volatilities on Ivy Apollo and Ivy Energy 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 Ivy Apollo with a short position of Ivy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Apollo and Ivy Energy.
Diversification Opportunities for Ivy Apollo and Ivy Energy
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IVY and Ivy is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Apollo Multi Asset and Ivy Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Energy Fund and Ivy Apollo 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 Ivy Apollo Multi Asset are associated (or correlated) with Ivy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Energy Fund has no effect on the direction of Ivy Apollo i.e., Ivy Apollo and Ivy Energy go up and down completely randomly.
Pair Corralation between Ivy Apollo and Ivy Energy
Assuming the 90 days horizon Ivy Apollo is expected to generate 1.86 times less return on investment than Ivy Energy. But when comparing it to its historical volatility, Ivy Apollo Multi Asset is 2.27 times less risky than Ivy Energy. It trades about 0.14 of its potential returns per unit of risk. Ivy Energy Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 937.00 in Ivy Energy Fund on September 2, 2024 and sell it today you would earn a total of 23.00 from holding Ivy Energy Fund or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivy Apollo Multi Asset vs. Ivy Energy Fund
Performance |
| Timeline |
| Ivy Apollo Multi |
| Ivy Energy Fund |
Ivy Apollo and Ivy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivy Apollo and Ivy Energy
The main advantage of trading using opposite Ivy Apollo and Ivy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Apollo position performs unexpectedly, Ivy Energy 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 Ivy Energy will offset losses from the drop in Ivy Energy's long position.| Ivy Apollo vs. Ivy Large Cap | Ivy Apollo vs. Ivy Small Cap | Ivy Apollo vs. Ivy High Income | Ivy Apollo vs. Ivy Small Cap |
| Ivy Energy vs. Ivy Large Cap | Ivy Energy vs. Ivy Small Cap | Ivy Energy vs. Ivy High Income | Ivy Energy vs. Ivy Apollo Multi Asset |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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