Correlation Between Ivanhoe Electric and Pimco Dynamic

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

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

Diversification Opportunities for Ivanhoe Electric and Pimco Dynamic

-0.56

Correlation Coefficient

Ivanhoe Electric  Pimco Dynamic

Excellent diversification

The 3 months correlation between Ivanhoe and Pimco is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Pimco Dynamic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Dynamic Income 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 Pimco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Dynamic Income has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Pimco Dynamic go up and down completely randomly.

Pair Corralation between Ivanhoe Electric and Pimco Dynamic

Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Pimco Dynamic. In addition to that, Ivanhoe Electric is 7.18 times more volatile than Pimco Dynamic Income. It trades about -0.04 of its total potential returns per unit of risk. Pimco Dynamic Income is currently generating about 0.2 per unit of volatility. If you would invest  1,299  in Pimco Dynamic Income on December 26, 2024 and sell it today you would earn a total of  88.00  from holding Pimco Dynamic Income or generate 6.77% 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.  Pimco Dynamic Income

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 latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pimco Dynamic Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Pimco Dynamic may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ivanhoe Electric and Pimco Dynamic

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

The idea behind Ivanhoe Electric and Pimco Dynamic Income 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.