Correlation Between Ion Beam and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Ion Beam and Cornish 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 Cornish 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 Cornish Metals, you can compare the effects of market volatilities on Ion Beam and Cornish 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 Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Cornish Metals.
Diversification Opportunities for Ion Beam and Cornish Metals
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ion and Cornish is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals 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 Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Ion Beam i.e., Ion Beam and Cornish Metals go up and down completely randomly.
Pair Corralation between Ion Beam and Cornish Metals
Assuming the 90 days trading horizon Ion Beam Applications is expected to under-perform the Cornish Metals. But the stock apears to be less risky and, when comparing its historical volatility, Ion Beam Applications is 2.21 times less risky than Cornish Metals. The stock trades about -0.1 of its potential returns per unit of risk. The Cornish Metals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 835.00 in Cornish Metals on October 12, 2024 and sell it today you would earn a total of 90.00 from holding Cornish Metals or generate 10.78% 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. Cornish Metals
Performance |
| Timeline |
| Ion Beam Applications |
| Cornish Metals |
Ion Beam and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Cornish Metals
The main advantage of trading using opposite Ion Beam and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, Cornish 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 Cornish Metals will offset losses from the drop in Cornish 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 |
| Cornish Metals vs. Zegona Communications Plc | Cornish Metals vs. Omega Healthcare Investors | Cornish Metals vs. Induction Healthcare Group | Cornish Metals vs. Inspiration Healthcare Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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