Correlation Between Ion Beam and Capital Metals
Can any of the company-specific risk be diversified away by investing in both Ion Beam and Capital Metals 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 Capital Metals 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 Capital Metals PLC, you can compare the effects of market volatilities on Ion Beam and Capital Metals 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 Capital Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Capital Metals.
Diversification Opportunities for Ion Beam and Capital Metals
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ion and Capital is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Capital Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Metals PLC 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 Capital Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Metals PLC has no effect on the direction of Ion Beam i.e., Ion Beam and Capital Metals go up and down completely randomly.
Pair Corralation between Ion Beam and Capital Metals
Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 0.65 times more return on investment than Capital Metals. However, Ion Beam Applications is 1.54 times less risky than Capital Metals. It trades about -0.1 of its potential returns per unit of risk. Capital Metals PLC is currently generating about -0.33 per unit of risk. If you would invest 1,362 in Ion Beam Applications on October 12, 2024 and sell it today you would lose (31.00) from holding Ion Beam Applications or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ion Beam Applications vs. Capital Metals PLC
Performance |
| Timeline |
| Ion Beam Applications |
| Capital Metals PLC |
Ion Beam and Capital Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Capital Metals
The main advantage of trading using opposite Ion Beam and Capital Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, Capital Metals 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 Capital Metals will offset losses from the drop in Capital Metals' long position.| Ion Beam vs. Ashtead Technology Holdings | Ion Beam vs. Polar Capital Technology | Ion Beam vs. Cars Inc | Ion Beam vs. Sartorius Stedim Biotech |
| Capital Metals vs. Givaudan SA | Capital Metals vs. Antofagasta PLC | Capital Metals vs. Ferrexpo PLC | Capital Metals vs. Atalaya Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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