Correlation Between GoldMining and Ivanhoe Energy

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

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

Diversification Opportunities for GoldMining and Ivanhoe Energy

-0.5

Correlation Coefficient

GoldMining  Ivanhoe Energy

Very good diversification

The 3 months correlation between GoldMining and Ivanhoe is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Ivanhoe Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivanhoe Energy and GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Ivanhoe Energy go up and down completely randomly.

Pair Corralation between GoldMining and Ivanhoe Energy

Assuming the 90 days trading horizon GoldMining is expected to under-perform the Ivanhoe Energy. But the stock apears to be less risky and, when comparing its historical volatility, GoldMining is 1.75 times less risky than Ivanhoe Energy. The stock trades about 0.0 of its potential returns per unit of risk. The Ivanhoe Energy is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  930.00  in Ivanhoe Energy on April 24, 2025 and sell it today you would earn a total of  687.00  from holding Ivanhoe Energy or generate 73.87% return on investment over 90 days.

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

GoldMining  vs.  Ivanhoe Energy

GoldMining

Risk-Adjusted Performance

Very Weak

Over the last 90 days GoldMining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, GoldMining is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Ivanhoe Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Energy are ranked lower than 20 (%) 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.

Pair Trading with GoldMining and Ivanhoe Energy

The main advantage of trading using opposite GoldMining and Ivanhoe Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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 GoldMining 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.