Correlation Between RBC Discount and Ivanhoe Energy

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both RBC Discount and Ivanhoe Energy 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 RBC Discount and Ivanhoe Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RBC Discount Bond and Ivanhoe Energy, you can compare the effects of market volatilities on RBC Discount and Ivanhoe Energy 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 RBC Discount with a short position of Ivanhoe Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBC Discount and Ivanhoe Energy.

Diversification Opportunities for RBC Discount and Ivanhoe Energy

-0.46
  Correlation Coefficient

Very good diversification

The 3 months correlation between RBC and Ivanhoe is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding RBC Discount Bond and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and RBC Discount 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 RBC Discount Bond are associated (or correlated) with Ivanhoe Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivanhoe Energy has no effect on the direction of RBC Discount i.e., RBC Discount and Ivanhoe Energy go up and down completely randomly.

Pair Corralation between RBC Discount and Ivanhoe Energy

Assuming the 90 days trading horizon RBC Discount Bond is expected to generate 0.08 times more return on investment than Ivanhoe Energy. However, RBC Discount Bond is 12.82 times less risky than Ivanhoe Energy. It trades about 0.12 of its potential returns per unit of risk. Ivanhoe Energy is currently generating about 0.0 per unit of risk. If you would invest  1,979  in RBC Discount Bond on October 5, 2024 and sell it today you would earn a total of  210.00  from holding RBC Discount Bond or generate 10.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

RBC Discount Bond  vs.  Ivanhoe Energy

 Performance 
       Timeline  
RBC Discount Bond 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in RBC Discount Bond are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, RBC Discount is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Ivanhoe Energy 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 very healthy basic indicators, Ivanhoe Energy is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

RBC Discount and Ivanhoe Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with RBC Discount and Ivanhoe Energy

The main advantage of trading using opposite RBC Discount and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Discount position performs unexpectedly, Ivanhoe Energy 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 Ivanhoe Energy will offset losses from the drop in Ivanhoe Energy's long position.
The idea behind RBC Discount Bond and Ivanhoe Energy 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

Other Complementary Tools

Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA