Correlation Between SNDL and Ivanhoe Electric
Can any of the company-specific risk be diversified away by investing in both SNDL 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 SNDL and Ivanhoe Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNDL Inc and Ivanhoe Electric, you can compare the effects of market volatilities on SNDL 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 SNDL with a short position of Ivanhoe Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNDL and Ivanhoe Electric.
Diversification Opportunities for SNDL and Ivanhoe Electric
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SNDL and Ivanhoe is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding SNDL Inc and Ivanhoe Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Electric and SNDL 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 SNDL Inc 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 SNDL i.e., SNDL and Ivanhoe Electric go up and down completely randomly.
Pair Corralation between SNDL and Ivanhoe Electric
Given the investment horizon of 90 days SNDL Inc is expected to generate 1.2 times more return on investment than Ivanhoe Electric. However, SNDL is 1.2 times more volatile than Ivanhoe Electric. It trades about -0.11 of its potential returns per unit of risk. Ivanhoe Electric is currently generating about -0.14 per unit of risk. If you would invest 216.00 in SNDL Inc on September 3, 2024 and sell it today you would lose (23.00) from holding SNDL Inc or give up 10.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNDL Inc vs. Ivanhoe Electric
Performance |
| Timeline |
| SNDL Inc |
| Ivanhoe Electric |
SNDL and Ivanhoe Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNDL and Ivanhoe Electric
The main advantage of trading using opposite SNDL and Ivanhoe Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNDL 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.The idea behind SNDL Inc and Ivanhoe Electric pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ivanhoe Electric vs. Lipocine | Ivanhoe Electric vs. Valneva SE ADR | Ivanhoe Electric vs. Analog Devices | Ivanhoe Electric vs. Brandywine Realty Trust |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stocks Directory Find actively traded stocks across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |