Correlation Between Ivanhoe Electric and Corteva

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

By analyzing existing cross correlation between Ivanhoe Electric and Corteva, you can compare the effects of market volatilities on Ivanhoe Electric and Corteva 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 Electric with a short position of Corteva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Electric and Corteva.

Diversification Opportunities for Ivanhoe Electric and Corteva

-0.41

Correlation Coefficient

Ivanhoe Electric  Corteva

Very good diversification

The 3 months correlation between Ivanhoe and Corteva is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Corteva in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corteva and Ivanhoe Electric 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 Electric are associated (or correlated) with Corteva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corteva has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Corteva go up and down completely randomly.

Pair Corralation between Ivanhoe Electric and Corteva

Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Corteva. In addition to that, Ivanhoe Electric is 2.63 times more volatile than Corteva. It trades about -0.16 of its total potential returns per unit of risk. Corteva is currently generating about 0.02 per unit of volatility. If you would invest  6,223  in Corteva on December 1, 2024 and sell it today you would earn a total of  75.00  from holding Corteva or generate 1.21% return on investment over 90 days.

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

Ivanhoe Electric  vs.  Corteva

Ivanhoe Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Electric has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Corteva

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Corteva are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Corteva is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ivanhoe Electric and Corteva

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

The idea behind Ivanhoe Electric and Corteva 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.