Correlation Between Ion Beam and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Ion Beam and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Ion Beam and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Ross Stores.
Diversification Opportunities for Ion Beam and Ross Stores
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ion and Ross is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Ion Beam i.e., Ion Beam and Ross Stores go up and down completely randomly.
Pair Corralation between Ion Beam and Ross Stores
Assuming the 90 days trading horizon Ion Beam is expected to generate 8.07 times less return on investment than Ross Stores. In addition to that, Ion Beam is 1.52 times more volatile than Ross Stores. It trades about 0.02 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.3 per unit of volatility. If you would invest 13,935 in Ross Stores on August 31, 2024 and sell it today you would earn a total of 1,613 from holding Ross Stores or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ion Beam Applications vs. Ross Stores
Performance |
| Timeline |
| Ion Beam Applications |
| Ross Stores |
Ion Beam and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Ross Stores
The main advantage of trading using opposite Ion Beam and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Ion Beam vs. Neometals | Ion Beam vs. Coor Service Management | Ion Beam vs. Aeorema Communications Plc | Ion Beam vs. JLEN Environmental Assets |
| Ross Stores vs. Centaur Media | Ross Stores vs. Everyman Media Group | Ross Stores vs. bet at home AG | Ross Stores vs. MediaZest plc |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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