Correlation Between Ivanhoe Electric and Pimco Dynamic

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

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

Diversification Opportunities for Ivanhoe Electric and Pimco Dynamic

0.38

Correlation Coefficient

Ivanhoe Electric  Pimco Dynamic

Weak diversification

The 3 months correlation between Ivanhoe and Pimco is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric and Pimco Dynamic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Dynamic Income and Ivanhoe Electric 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 Electric are associated (or correlated) with Pimco Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Dynamic Income has no effect on the direction of Ivanhoe Electric i.e., Ivanhoe Electric and Pimco Dynamic go up and down completely randomly.

Pair Corralation between Ivanhoe Electric and Pimco Dynamic

Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to generate 3.19 times more return on investment than Pimco Dynamic. However, Ivanhoe Electric is 3.19 times more volatile than Pimco Dynamic Income. It trades about 0.33 of its potential returns per unit of risk. Pimco Dynamic Income is currently generating about -0.02 per unit of risk. If you would invest  911.00  in Ivanhoe Electric on August 13, 2024 and sell it today you would earn a total of  184.00  from holding Ivanhoe Electric or generate 20.2% return on investment over 90 days.

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

Ivanhoe Electric  vs.  Pimco Dynamic Income

Ivanhoe Electric

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivanhoe Electric are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Ivanhoe Electric exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pimco Dynamic Income

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pimco Dynamic Income are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Pimco Dynamic is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Ivanhoe Electric and Pimco Dynamic

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

The idea behind Ivanhoe Electric and Pimco Dynamic Income 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.