Correlation Between Ion Beam and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Ion Beam and Southern Copper 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 Southern Copper 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 Southern Copper Corp, you can compare the effects of market volatilities on Ion Beam and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Southern Copper.
Diversification Opportunities for Ion Beam and Southern Copper
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ion and Southern is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Ion Beam i.e., Ion Beam and Southern Copper go up and down completely randomly.
Pair Corralation between Ion Beam and Southern Copper
Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 1.14 times more return on investment than Southern Copper. However, Ion Beam is 1.14 times more volatile than Southern Copper Corp. It trades about 0.07 of its potential returns per unit of risk. Southern Copper Corp is currently generating about 0.05 per unit of risk. If you would invest 1,324 in Ion Beam Applications on September 13, 2024 and sell it today you would earn a total of 38.00 from holding Ion Beam Applications or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ion Beam Applications vs. Southern Copper Corp
Performance |
| Timeline |
| Ion Beam Applications |
| Southern Copper Corp |
Ion Beam and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Southern Copper
The main advantage of trading using opposite Ion Beam and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Ion Beam vs. Samsung Electronics Co | Ion Beam vs. Samsung Electronics Co | Ion Beam vs. Hyundai Motor | Ion Beam vs. Reliance Industries Ltd |
| Southern Copper vs. Electronic Arts | Southern Copper vs. Impax Asset Management | Southern Copper vs. Dentsply Sirona | Southern Copper vs. Southwest Airlines Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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