Correlation Between GMV Minerals and Ivanhoe Energy

Can any of the company-specific risk be diversified away by investing in both GMV 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 GMV 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 GMV Minerals and Ivanhoe Energy, you can compare the effects of market volatilities on GMV 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 GMV Minerals with a short position of Ivanhoe Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMV Minerals and Ivanhoe Energy.

Diversification Opportunities for GMV Minerals and Ivanhoe Energy

0.76

Correlation Coefficient

GMV Minerals  Ivanhoe Energy

Poor diversification

The 3 months correlation between GMV and Ivanhoe is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding GMV Minerals and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and GMV 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 GMV 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 GMV Minerals i.e., GMV Minerals and Ivanhoe Energy go up and down completely randomly.

Pair Corralation between GMV Minerals and Ivanhoe Energy

Assuming the 90 days horizon GMV Minerals is expected to generate 2.38 times less return on investment than Ivanhoe Energy. In addition to that, GMV Minerals is 1.97 times more volatile than Ivanhoe Energy. It trades about 0.03 of its total potential returns per unit of risk. Ivanhoe Energy is currently generating about 0.16 per unit of volatility. If you would invest  866.00  in Ivanhoe Energy on September 5, 2024 and sell it today you would earn a total of  369.00  from holding Ivanhoe Energy or generate 42.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

GMV Minerals  vs.  Ivanhoe Energy

GMV Minerals

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GMV Minerals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, GMV Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Ivanhoe Energy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Energy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ivanhoe Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GMV Minerals and Ivanhoe Energy

The main advantage of trading using opposite GMV Minerals and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMV 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.

The idea behind GMV Minerals and Ivanhoe Energy 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.