Correlation Between Ivanhoe Energy and Nickel 28

Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and Nickel 28 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 Nickel 28 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ivanhoe Energy and Nickel 28 Capital, you can compare the effects of market volatilities on Ivanhoe Energy and Nickel 28 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 Nickel 28. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Nickel 28.

Diversification Opportunities for Ivanhoe Energy and Nickel 28

0.22

Correlation Coefficient

Ivanhoe Energy  Nickel 28

Modest diversification

The 3 months correlation between Ivanhoe and Nickel is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Nickel 28 Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nickel 28 Capital 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 Nickel 28. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nickel 28 Capital has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Nickel 28 go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Nickel 28

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Nickel 28. In addition to that, Ivanhoe Energy is 1.25 times more volatile than Nickel 28 Capital. It trades about -0.02 of its total potential returns per unit of risk. Nickel 28 Capital is currently generating about -0.01 per unit of volatility. If you would invest  117.00  in Nickel 28 Capital on October 22, 2024 and sell it today you would lose (33.00) from holding Nickel 28 Capital or give up 28.21% 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.  Nickel 28 Capital

Ivanhoe Energy

Risk-Adjusted Performance

0 of 100

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

Nickel 28 Capital

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nickel 28 Capital are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Nickel 28 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ivanhoe Energy and Nickel 28

The main advantage of trading using opposite Ivanhoe Energy and Nickel 28 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, Nickel 28 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 Nickel 28 will offset losses from the drop in Nickel 28's long position.

The idea behind Ivanhoe Energy and Nickel 28 Capital 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.