Correlation Between Aura Minerals and Ivanhoe Energy
Can any of the company-specific risk be diversified away by investing in both Aura Minerals 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 Aura Minerals and Ivanhoe Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Minerals and Ivanhoe Energy, you can compare the effects of market volatilities on Aura Minerals 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 Aura Minerals with a short position of Ivanhoe Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Minerals and Ivanhoe Energy.
Diversification Opportunities for Aura Minerals and Ivanhoe Energy
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aura and Ivanhoe is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aura Minerals and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and Aura Minerals 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 Aura 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 Aura Minerals i.e., Aura Minerals and Ivanhoe Energy go up and down completely randomly.
Pair Corralation between Aura Minerals and Ivanhoe Energy
Assuming the 90 days trading horizon Aura Minerals is expected to generate 0.62 times more return on investment than Ivanhoe Energy. However, Aura Minerals is 1.62 times less risky than Ivanhoe Energy. It trades about 0.66 of its potential returns per unit of risk. Ivanhoe Energy is currently generating about 0.02 per unit of risk. If you would invest 1,798 in Aura Minerals on November 27, 2024 and sell it today you would earn a total of 452.00 from holding Aura Minerals or generate 25.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aura Minerals vs. Ivanhoe Energy
Performance |
| Timeline |
| Aura Minerals |
| Ivanhoe Energy |
Aura Minerals and Ivanhoe Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Minerals and Ivanhoe Energy
The main advantage of trading using opposite Aura Minerals and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Minerals 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.| Aura Minerals vs. Entree Resources | Aura Minerals vs. Wesdome Gold Mines | Aura Minerals vs. Eastern Platinum Limited | Aura Minerals vs. Platinum Group Metals |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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