Correlation Between Ivy Energy and Guinness Atkinson

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

By analyzing existing cross correlation between Ivy Energy Fund and Guinness Atkinson Global, you can compare the effects of market volatilities on Ivy Energy and Guinness Atkinson 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 Ivy Energy with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Energy and Guinness Atkinson.

Diversification Opportunities for Ivy Energy and Guinness Atkinson

0.94

Correlation Coefficient

Ivy Energy  Guinness Atkinson

Almost no diversification

The 3 months correlation between Ivy and Guinness is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Energy Fund and Guinness Atkinson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson Global and Ivy 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 Ivy Energy Fund are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson Global has no effect on the direction of Ivy Energy i.e., Ivy Energy and Guinness Atkinson go up and down completely randomly.

Pair Corralation between Ivy Energy and Guinness Atkinson

Assuming the 90 days horizon Ivy Energy Fund is expected to under-perform the Guinness Atkinson. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ivy Energy Fund is 1.26 times less risky than Guinness Atkinson. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Guinness Atkinson Global is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,349  in Guinness Atkinson Global on October 7, 2024 and sell it today you would lose (156.00) from holding Guinness Atkinson Global or give up 6.64% of portfolio value over 90 days.

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

Ivy Energy Fund  vs.  Guinness Atkinson Global

Ivy Energy Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ivy Energy Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Guinness Atkinson Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guinness Atkinson Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Ivy Energy and Guinness Atkinson

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

The idea behind Ivy Energy Fund and Guinness Atkinson Global 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.