Correlation Between Ivanhoe Energy and Gunpoint Exploration

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

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

Diversification Opportunities for Ivanhoe Energy and Gunpoint Exploration

-0.1

Correlation Coefficient

Ivanhoe Energy  Gunpoint Exploration

Good diversification

The 3 months correlation between Ivanhoe and Gunpoint is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Gunpoint Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunpoint Exploration 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 Gunpoint Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunpoint Exploration has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Gunpoint Exploration go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Gunpoint Exploration

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Gunpoint Exploration. In addition to that, Ivanhoe Energy is 1.36 times more volatile than Gunpoint Exploration. It trades about -0.17 of its total potential returns per unit of risk. Gunpoint Exploration is currently generating about -0.01 per unit of volatility. If you would invest  60.00  in Gunpoint Exploration on November 29, 2024 and sell it today you would lose (2.00) from holding Gunpoint Exploration or give up 3.33% of portfolio value over 90 days.

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

Ivanhoe Energy  vs.  Gunpoint Exploration

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 March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Gunpoint Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gunpoint Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gunpoint Exploration is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ivanhoe Energy and Gunpoint Exploration

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

The idea behind Ivanhoe Energy and Gunpoint Exploration 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.