Correlation Between Ivanhoe Energy and 5N Plus

Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy and 5N Plus 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 5N Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ivanhoe Energy and 5N Plus, you can compare the effects of market volatilities on Ivanhoe Energy and 5N Plus 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 5N Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and 5N Plus.

Diversification Opportunities for Ivanhoe Energy and 5N Plus

0.88

Correlation Coefficient

Ivanhoe Energy  5N Plus

Very poor diversification

The 3 months correlation between Ivanhoe and VNP is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and 5N Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 5N Plus 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 5N Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 5N Plus has no effect on the direction of Ivanhoe Energy i.e., Ivanhoe Energy and 5N Plus go up and down completely randomly.

Pair Corralation between Ivanhoe Energy and 5N Plus

Assuming the 90 days horizon Ivanhoe Energy is expected to generate 1.04 times less return on investment than 5N Plus. In addition to that, Ivanhoe Energy is 1.42 times more volatile than 5N Plus. It trades about 0.26 of its total potential returns per unit of risk. 5N Plus is currently generating about 0.38 per unit of volatility. If you would invest  634.00  in 5N Plus on April 24, 2025 and sell it today you would earn a total of  531.00  from holding 5N Plus or generate 83.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Ivanhoe Energy  vs.  5N Plus

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.

5N Plus

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in 5N Plus are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, 5N Plus displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ivanhoe Energy and 5N Plus

The main advantage of trading using opposite Ivanhoe Energy and 5N Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy position performs unexpectedly, 5N Plus 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 5N Plus will offset losses from the drop in 5N Plus' long position.

The idea behind Ivanhoe Energy and 5N Plus 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.