Correlation Between Global Resources and Ivy Energy

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

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

Diversification Opportunities for Global Resources and Ivy Energy

0.9

Correlation Coefficient

Global Resources  Ivy Energy

Almost no diversification

The 3 months correlation between Global and Ivy is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Global Resources Fund and Ivy Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Energy Fund and Global Resources 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 Global Resources Fund are associated (or correlated) with Ivy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Energy Fund has no effect on the direction of Global Resources i.e., Global Resources and Ivy Energy go up and down completely randomly.

Pair Corralation between Global Resources and Ivy Energy

Assuming the 90 days horizon Global Resources Fund is expected to generate 1.14 times more return on investment than Ivy Energy. However, Global Resources is 1.14 times more volatile than Ivy Energy Fund. It trades about 0.22 of its potential returns per unit of risk. Ivy Energy Fund is currently generating about 0.19 per unit of risk. If you would invest  376.00  in Global Resources Fund on May 5, 2025 and sell it today you would earn a total of  49.00  from holding Global Resources Fund or generate 13.03% return on investment over 90 days.

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

Global Resources Fund  vs.  Ivy Energy Fund

Global Resources

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Resources Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Global Resources may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Ivy Energy Fund

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivy Energy Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ivy Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Global Resources and Ivy Energy

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

The idea behind Global Resources Fund and Ivy Energy Fund 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.