Correlation Between Ivanhoe Energy and Endeavour Mining

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

Diversification Opportunities for Ivanhoe Energy and Endeavour Mining

-0.7

Correlation Coefficient

Ivanhoe Energy  Endeavour Mining

Excellent diversification

The 3 months correlation between Ivanhoe and Endeavour is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour 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 Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Endeavour Mining go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Endeavour Mining

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Endeavour Mining. In addition to that, Ivanhoe Energy is 2.05 times more volatile than Endeavour Mining Corp. It trades about 0.0 of its total potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.22 per unit of volatility. If you would invest  2,542  in Endeavour Mining Corp on December 24, 2024 and sell it today you would earn a total of  737.00  from holding Endeavour Mining Corp or generate 28.99% return on investment over 90 days.

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

Ivanhoe Energy  vs.  Endeavour 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 very healthy basic indicators, Ivanhoe Energy is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Endeavour Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Endeavour Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ivanhoe Energy and Endeavour Mining

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

The idea behind Ivanhoe Energy and Endeavour 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.