Correlation Between Ivanhoe Energy and Nano One

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

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

Diversification Opportunities for Ivanhoe Energy and Nano One

0.33

Correlation Coefficient

Ivanhoe Energy  Nano One

Weak diversification

The 3 months correlation between Ivanhoe and Nano is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials and Ivanhoe 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 Ivanhoe Energy are associated (or correlated) with Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Nano One go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Nano One

Assuming the 90 days horizon Ivanhoe Energy is expected to under-perform the Nano One. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Energy is 1.45 times less risky than Nano One. The stock trades about -0.24 of its potential returns per unit of risk. The Nano One Materials is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Nano One Materials on September 28, 2024 and sell it today you would earn a total of  11.00  from holding Nano One Materials or generate 13.58% return on investment over 90 days.

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

Ivanhoe Energy  vs.  Nano One Materials

Ivanhoe Energy

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Nano One Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nano One Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Ivanhoe Energy and Nano One

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

The idea behind Ivanhoe Energy and Nano One Materials 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.