Correlation Between Nano One and Ivanhoe Energy

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

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

Diversification Opportunities for Nano One and Ivanhoe Energy

0.33

Correlation Coefficient

Nano One  Ivanhoe Energy

Weak diversification

The 3 months correlation between Nano and Ivanhoe is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nano One Materials and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and Nano One 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 Nano One Materials 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 Nano One i.e., Nano One and Ivanhoe Energy go up and down completely randomly.

Pair Corralation between Nano One and Ivanhoe Energy

Assuming the 90 days trading horizon Nano One Materials is expected to under-perform the Ivanhoe Energy. In addition to that, Nano One is 1.1 times more volatile than Ivanhoe Energy. It trades about -0.03 of its total potential returns per unit of risk. Ivanhoe Energy is currently generating about -0.01 per unit of volatility. If you would invest  1,821  in Ivanhoe Energy on September 28, 2024 and sell it today you would lose (688.00) from holding Ivanhoe Energy or give up 37.78% of portfolio value over 90 days.

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

Nano One Materials  vs.  Ivanhoe Energy

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.

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.

Pair Trading with Nano One and Ivanhoe Energy

The main advantage of trading using opposite Nano One and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano One 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 Nano One Materials 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.