Correlation Between Ivanhoe Energy and Focus Graphite

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

By analyzing existing cross correlation between Ivanhoe Energy and Focus Graphite, you can compare the effects of market volatilities on Ivanhoe Energy and Focus Graphite 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 Focus Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Focus Graphite.

Diversification Opportunities for Ivanhoe Energy and Focus Graphite

-0.76

Correlation Coefficient

Ivanhoe Energy  Focus Graphite

Pay attention - limited upside

The 3 months correlation between Ivanhoe and Focus is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Focus Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Graphite 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 Focus Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Graphite has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Focus Graphite go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Focus Graphite

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Focus Graphite. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 1.71 times less risky than Focus Graphite. The stock trades about -0.2 of its potential returns per unit of risk. The Focus Graphite is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  9.00  in Focus Graphite on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Focus Graphite or generate 0.0% 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.  Focus Graphite

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.

Focus Graphite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Focus Graphite 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 fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Ivanhoe Energy and Focus Graphite

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

The idea behind Ivanhoe Energy and Focus Graphite 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.