Correlation Between Ivanhoe Energy and Aloro Mining

Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Aloro Mining 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 Ivanhoe Energy and Aloro Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ivanhoe Energy and Aloro Mining Corp, you can compare the effects of market volatilities on Ivanhoe Energy and Aloro Mining 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 Ivanhoe Energy with a short position of Aloro Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Aloro Mining.

Diversification Opportunities for Ivanhoe Energy and Aloro Mining

-0.26

Correlation Coefficient

Ivanhoe Energy  Aloro Mining

Very good diversification

The 3 months correlation between Ivanhoe and Aloro is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Aloro Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aloro Mining Corp and Ivanhoe Energy 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 Ivanhoe Energy are associated (or correlated) with Aloro Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aloro Mining Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Aloro Mining go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Aloro Mining

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Aloro Mining. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 3.95 times less risky than Aloro Mining. The stock trades about -0.15 of its potential returns per unit of risk. The Aloro Mining Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Aloro Mining Corp on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Aloro Mining Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Ivanhoe Energy  vs.  Aloro Mining Corp

Ivanhoe Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aloro Mining Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aloro Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Aloro Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ivanhoe Energy and Aloro Mining

The main advantage of trading using opposite Ivanhoe Energy and Aloro Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Aloro Mining 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 Aloro Mining will offset losses from the drop in Aloro Mining's long position.

The idea behind Ivanhoe Energy and Aloro Mining Corp 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.