Correlation Between Ion Beam and NOV
Can any of the company-specific risk be diversified away by investing in both Ion Beam and NOV 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 Ion Beam and NOV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ion Beam Applications and NOV Inc, you can compare the effects of market volatilities on Ion Beam and NOV 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 Ion Beam with a short position of NOV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and NOV.
Diversification Opportunities for Ion Beam and NOV
Average diversification
The 3 months correlation between Ion and NOV is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and NOV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOV Inc and Ion Beam 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 Ion Beam Applications are associated (or correlated) with NOV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOV Inc has no effect on the direction of Ion Beam i.e., Ion Beam and NOV go up and down completely randomly.
Pair Corralation between Ion Beam and NOV
Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 48.4 times more return on investment than NOV. However, Ion Beam is 48.4 times more volatile than NOV Inc. It trades about 0.04 of its potential returns per unit of risk. NOV Inc is currently generating about 0.13 per unit of risk. If you would invest 1,088 in Ion Beam Applications on September 14, 2024 and sell it today you would earn a total of 251.00 from holding Ion Beam Applications or generate 23.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ion Beam Applications vs. NOV Inc
Performance |
| Timeline |
| Ion Beam Applications |
| NOV Inc |
Ion Beam and NOV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and NOV
The main advantage of trading using opposite Ion Beam and NOV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, NOV 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 NOV will offset losses from the drop in NOV's long position.| Ion Beam vs. Finnair Oyj | Ion Beam vs. Wizz Air Holdings | Ion Beam vs. Infrastrutture Wireless Italiane | Ion Beam vs. Associated British Foods |
| NOV vs. MediaZest plc | NOV vs. McEwen Mining | NOV vs. Universal Music Group | NOV vs. European Metals Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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