Correlation Between Ivanhoe Energy and Gold Terra

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

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

Diversification Opportunities for Ivanhoe Energy and Gold Terra

-0.51

Correlation Coefficient

Ivanhoe Energy  Gold Terra

Excellent diversification

The 3 months correlation between Ivanhoe and Gold is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Gold Terra Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Terra Resource 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 Gold Terra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Terra Resource has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Gold Terra go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Gold Terra

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Gold Terra. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 1.8 times less risky than Gold Terra. The stock trades about -0.02 of its potential returns per unit of risk. The Gold Terra Resource is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Gold Terra Resource on December 2, 2024 and sell it today you would lose (8.50) from holding Gold Terra Resource or give up 60.71% of portfolio value over 90 days.

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

Ivanhoe Energy  vs.  Gold Terra Resource

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.

Gold Terra Resource

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Ivanhoe Energy and Gold Terra Resource 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.