Correlation Between Ivanhoe Energy and Interfor Corp

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

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

Diversification Opportunities for Ivanhoe Energy and Interfor Corp

0.28

Correlation Coefficient

Ivanhoe Energy  Interfor Corp

Modest diversification

The 3 months correlation between Ivanhoe and Interfor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Interfor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interfor 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 Interfor Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interfor Corp has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Interfor Corp go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Interfor Corp

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Interfor Corp. In addition to that, Ivanhoe Energy is 1.41 times more volatile than Interfor Corp. It trades about -0.06 of its total potential returns per unit of risk. Interfor Corp is currently generating about -0.04 per unit of volatility. If you would invest  1,628  in Interfor Corp on December 30, 2024 and sell it today you would lose (149.00) from holding Interfor Corp or give up 9.15% of portfolio value over 90 days.

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

Ivanhoe Energy  vs.  Interfor 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.

Interfor Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Interfor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Ivanhoe Energy and Interfor Corp

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

The idea behind Ivanhoe Energy and Interfor 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.