Correlation Between Ivanhoe Energy and Orla Mining

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

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

Diversification Opportunities for Ivanhoe Energy and Orla Mining

0.54

Correlation Coefficient

Ivanhoe Energy  Orla Mining

Very weak diversification

The 3 months correlation between Ivanhoe and Orla is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Orla Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orla Mining 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 Orla Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orla Mining has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Orla Mining go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Orla Mining

Assuming the 90 days horizon Ivanhoe Energy is expected to generate 1.68 times less return on investment than Orla Mining. In addition to that, Ivanhoe Energy is 1.17 times more volatile than Orla Mining. It trades about 0.08 of its total potential returns per unit of risk. Orla Mining is currently generating about 0.16 per unit of volatility. If you would invest  586.00  in Orla Mining on September 12, 2024 and sell it today you would earn a total of  213.00  from holding Orla Mining or generate 36.35% return on investment over 90 days.

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

Ivanhoe Energy  vs.  Orla Mining

Ivanhoe Energy

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ivanhoe Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Orla Mining

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Orla Mining are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Orla Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ivanhoe Energy and Orla Mining

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

The idea behind Ivanhoe Energy and Orla Mining 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.