Correlation Between Ion Beam and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Ion Beam and Thor Industries 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 Thor Industries 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 Thor Industries, you can compare the effects of market volatilities on Ion Beam and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Thor Industries.
Diversification Opportunities for Ion Beam and Thor Industries
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ion and Thor is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Ion Beam i.e., Ion Beam and Thor Industries go up and down completely randomly.
Pair Corralation between Ion Beam and Thor Industries
Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 0.55 times more return on investment than Thor Industries. However, Ion Beam Applications is 1.82 times less risky than Thor Industries. It trades about -0.09 of its potential returns per unit of risk. Thor Industries is currently generating about -0.26 per unit of risk. If you would invest 1,362 in Ion Beam Applications on October 11, 2024 and sell it today you would lose (27.00) from holding Ion Beam Applications or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.95% |
| Values | Daily Returns |
Ion Beam Applications vs. Thor Industries
Performance |
| Timeline |
| Ion Beam Applications |
| Thor Industries |
Ion Beam and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Thor Industries
The main advantage of trading using opposite Ion Beam and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.The idea behind Ion Beam Applications and Thor Industries 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.| Thor Industries vs. Fidelity National Information | Thor Industries vs. Gamma Communications PLC | Thor Industries vs. Ion Beam Applications | Thor Industries vs. Dairy Farm International |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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