Correlation Between Magna Terra and Ivanhoe Energy
Can any of the company-specific risk be diversified away by investing in both Magna Terra and Ivanhoe 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 Magna Terra and Ivanhoe Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magna Terra Minerals and Ivanhoe Energy, you can compare the effects of market volatilities on Magna Terra and Ivanhoe 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 Magna Terra with a short position of Ivanhoe Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magna Terra and Ivanhoe Energy.
Diversification Opportunities for Magna Terra and Ivanhoe Energy
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magna and Ivanhoe is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Magna Terra Minerals and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and Magna Terra 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 Magna Terra Minerals are associated (or correlated) with Ivanhoe Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Energy has no effect on the direction of Magna Terra i.e., Magna Terra and Ivanhoe Energy go up and down completely randomly.
Pair Corralation between Magna Terra and Ivanhoe Energy
Assuming the 90 days horizon Magna Terra Minerals is expected to generate 3.97 times more return on investment than Ivanhoe Energy. However, Magna Terra is 3.97 times more volatile than Ivanhoe Energy. It trades about 0.08 of its potential returns per unit of risk. Ivanhoe Energy is currently generating about 0.01 per unit of risk. If you would invest 3.00 in Magna Terra Minerals on September 1, 2024 and sell it today you would lose (0.50) from holding Magna Terra Minerals or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magna Terra Minerals vs. Ivanhoe Energy
Performance |
| Timeline |
| Magna Terra Minerals |
| Ivanhoe Energy |
Magna Terra and Ivanhoe Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magna Terra and Ivanhoe Energy
The main advantage of trading using opposite Magna Terra and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magna Terra position performs unexpectedly, Ivanhoe 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 Ivanhoe Energy will offset losses from the drop in Ivanhoe Energy's long position.| Magna Terra vs. Kiplin Metals | Magna Terra vs. Pure Energy Minerals | Magna Terra vs. Noram Lithium Corp | Magna Terra vs. Minnova Corp |
| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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