Correlation Between Patagonia Gold and Ivanhoe Energy
Can any of the company-specific risk be diversified away by investing in both Patagonia Gold 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 Patagonia Gold and Ivanhoe Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patagonia Gold Corp and Ivanhoe Energy, you can compare the effects of market volatilities on Patagonia Gold 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 Patagonia Gold with a short position of Ivanhoe Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patagonia Gold and Ivanhoe Energy.
Diversification Opportunities for Patagonia Gold and Ivanhoe Energy
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Patagonia and Ivanhoe is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Patagonia Gold Corp and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and Patagonia Gold 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 Patagonia Gold Corp 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 Patagonia Gold i.e., Patagonia Gold and Ivanhoe Energy go up and down completely randomly.
Pair Corralation between Patagonia Gold and Ivanhoe Energy
Assuming the 90 days trading horizon Patagonia Gold Corp is expected to generate 4.21 times more return on investment than Ivanhoe Energy. However, Patagonia Gold is 4.21 times more volatile than Ivanhoe Energy. It trades about 0.09 of its potential returns per unit of risk. Ivanhoe Energy is currently generating about 0.14 per unit of risk. If you would invest 3.00 in Patagonia Gold Corp on August 25, 2024 and sell it today you would earn a total of 0.50 from holding Patagonia Gold Corp or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patagonia Gold Corp vs. Ivanhoe Energy
Performance |
| Timeline |
| Patagonia Gold Corp |
| Ivanhoe Energy |
Patagonia Gold and Ivanhoe Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patagonia Gold and Ivanhoe Energy
The main advantage of trading using opposite Patagonia Gold and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patagonia Gold 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.| Patagonia Gold vs. First Majestic Silver | Patagonia Gold vs. Ivanhoe Energy | Patagonia Gold vs. Orezone Gold Corp | Patagonia Gold vs. Faraday Copper Corp |
| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited | Ivanhoe Energy vs. iShares Canadian HYBrid |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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