Correlation Between Ivanhoe Energy and Silver Grail

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

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

Diversification Opportunities for Ivanhoe Energy and Silver Grail

-0.64

Correlation Coefficient

Ivanhoe Energy  Silver Grail

Excellent diversification

The 3 months correlation between Ivanhoe and Silver is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Silver Grail Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Grail Resources 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 Silver Grail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Grail Resources has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and Silver Grail go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and Silver Grail

Assuming the 90 days horizon Ivanhoe Energy is expected to generate 0.65 times more return on investment than Silver Grail. However, Ivanhoe Energy is 1.54 times less risky than Silver Grail. It trades about 0.18 of its potential returns per unit of risk. Silver Grail Resources is currently generating about -0.1 per unit of risk. If you would invest  866.00  in Ivanhoe Energy on September 5, 2024 and sell it today you would earn a total of  411.00  from holding Ivanhoe Energy or generate 47.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Ivanhoe Energy  vs.  Silver Grail Resources

Ivanhoe Energy

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Energy are ranked lower than 13 (%) 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.

Silver Grail Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silver Grail Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Ivanhoe Energy and Silver Grail

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

The idea behind Ivanhoe Energy and Silver Grail 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.