Correlation Between Ivanhoe Energy and Silver One

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

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

Diversification Opportunities for Ivanhoe Energy and Silver One

0.16

Correlation Coefficient

Ivanhoe Energy  Silver One

Average diversification

The 3 months correlation between Ivanhoe and Silver is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Silver One Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver One Resources 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 Silver One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver One Resources has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Silver One go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Silver One

Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.79 times more return on investment than Silver One. However, Ivanhoe Energy is 1.27 times less risky than Silver One. It trades about 0.18 of its potential returns per unit of risk. Silver One Resources is currently generating about -0.02 per unit of risk. If you would invest  866.00  in Ivanhoe Energy on September 5, 2024 and sell it today you would earn a total of  411.00  from holding Ivanhoe Energy or generate 47.46% return on investment over 90 days.

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

Ivanhoe Energy  vs.  Silver One Resources

Ivanhoe Energy

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Energy are ranked lower than 13 (%) 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.

Silver One Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver One Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Silver One 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 Silver One

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

The idea behind Ivanhoe Energy and Silver One Resources 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.