Correlation Between Puma Exploration and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both Puma Exploration and Ivanhoe Electric 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 Puma Exploration and Ivanhoe Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puma Exploration and Ivanhoe Electric, you can compare the effects of market volatilities on Puma Exploration and Ivanhoe Electric 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 Puma Exploration with a short position of Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puma Exploration and Ivanhoe Electric.
Diversification Opportunities for Puma Exploration and Ivanhoe Electric
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Puma and Ivanhoe is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Puma Exploration and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and Puma Exploration 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 Puma Exploration are associated (or correlated) with Ivanhoe Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Electric has no effect on the direction of Puma Exploration i.e., Puma Exploration and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between Puma Exploration and Ivanhoe Electric
Assuming the 90 days horizon Puma Exploration is expected to generate 1.61 times more return on investment than Ivanhoe Electric. However, Puma Exploration is 1.61 times more volatile than Ivanhoe Electric. It trades about 0.01 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about 0.01 per unit of risk. If you would invest 13.00 in Puma Exploration on August 30, 2024 and sell it today you would lose (7.00) from holding Puma Exploration or give up 53.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Puma Exploration vs. Ivanhoe Electric
Performance |
| Timeline |
| Puma Exploration |
| Ivanhoe Electric |
Puma Exploration and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puma Exploration and Ivanhoe Electric
The main advantage of trading using opposite Puma Exploration and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puma Exploration position performs unexpectedly, Ivanhoe Electric 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 Electric will offset losses from the drop in Ivanhoe Electric's long position.| Puma Exploration vs. Sixty North Gold | Puma Exploration vs. Red Pine Exploration | Puma Exploration vs. Grande Portage Resources | Puma Exploration vs. Altamira Gold Corp |
| Ivanhoe Electric vs. Primoris Services | Ivanhoe Electric vs. Jacobs Solutions | Ivanhoe Electric vs. Newpark Resources | Ivanhoe Electric vs. Paiute Oil Mining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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