Correlation Between Ivy Energy and Blackrock Natural

Can any of the company-specific risk be diversified away by investing in both Ivy Energy and Blackrock Natural 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 Blackrock Natural 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 Blackrock Natural Resources, you can compare the effects of market volatilities on Ivy Energy and Blackrock Natural 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 Blackrock Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Energy and Blackrock Natural.

Diversification Opportunities for Ivy Energy and Blackrock Natural

0.94

Correlation Coefficient

Ivy Energy  Blackrock Natural

Almost no diversification

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

Pair Corralation between Ivy Energy and Blackrock Natural

Assuming the 90 days horizon Ivy Energy is expected to generate 1.98 times less return on investment than Blackrock Natural. In addition to that, Ivy Energy is 1.45 times more volatile than Blackrock Natural Resources. It trades about 0.24 of its total potential returns per unit of risk. Blackrock Natural Resources is currently generating about 0.68 per unit of volatility. If you would invest  2,649  in Blackrock Natural Resources on October 22, 2024 and sell it today you would earn a total of  170.00  from holding Blackrock Natural Resources or generate 6.42% return on investment over 90 days.

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

Ivy Energy Fund  vs.  Blackrock Natural Resources

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 fairly strong basic indicators, Ivy Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Natural

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Natural Resources has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Blackrock Natural is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ivy Energy and Blackrock Natural

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

The idea behind Ivy Energy Fund and Blackrock Natural 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.