Correlation Between IShares Canadian and Ivanhoe Energy
Can any of the company-specific risk be diversified away by investing in both IShares Canadian 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 IShares Canadian and Ivanhoe Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Canadian HYBrid and Ivanhoe Energy, you can compare the effects of market volatilities on IShares Canadian 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 IShares Canadian with a short position of Ivanhoe Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Canadian and Ivanhoe Energy.
Diversification Opportunities for IShares Canadian and Ivanhoe Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Ivanhoe is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding iShares Canadian HYBrid and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and IShares Canadian 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 iShares Canadian HYBrid 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 IShares Canadian i.e., IShares Canadian and Ivanhoe Energy go up and down completely randomly.
Pair Corralation between IShares Canadian and Ivanhoe Energy
Assuming the 90 days trading horizon IShares Canadian is expected to generate 27.54 times less return on investment than Ivanhoe Energy. But when comparing it to its historical volatility, iShares Canadian HYBrid is 16.03 times less risky than Ivanhoe Energy. It trades about 0.09 of its potential returns per unit of risk. Ivanhoe Energy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 980.00 in Ivanhoe Energy on August 25, 2024 and sell it today you would earn a total of 370.00 from holding Ivanhoe Energy or generate 37.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
iShares Canadian HYBrid vs. Ivanhoe Energy
Performance |
| Timeline |
| iShares Canadian HYBrid |
| Ivanhoe Energy |
IShares Canadian and Ivanhoe Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Canadian and Ivanhoe Energy
The main advantage of trading using opposite IShares Canadian and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Canadian 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.| IShares Canadian vs. iShares IG Corporate | IShares Canadian vs. iShares High Yield | IShares Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares JP Morgan |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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