Correlation Between Ion Beam and Trellus Health
Can any of the company-specific risk be diversified away by investing in both Ion Beam and Trellus Health 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 Trellus Health 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 Trellus Health plc, you can compare the effects of market volatilities on Ion Beam and Trellus Health 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 Trellus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Trellus Health.
Diversification Opportunities for Ion Beam and Trellus Health
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ion and Trellus is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Trellus Health plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trellus Health 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 Trellus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trellus Health plc has no effect on the direction of Ion Beam i.e., Ion Beam and Trellus Health go up and down completely randomly.
Pair Corralation between Ion Beam and Trellus Health
Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 0.43 times more return on investment than Trellus Health. However, Ion Beam Applications is 2.31 times less risky than Trellus Health. It trades about 0.04 of its potential returns per unit of risk. Trellus Health plc is currently generating about -0.26 per unit of risk. If you would invest 1,341 in Ion Beam Applications on October 14, 2024 and sell it today you would earn a total of 10.00 from holding Ion Beam Applications or generate 0.75% 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. Trellus Health plc
Performance |
Timeline |
Ion Beam Applications |
Trellus Health plc |
Ion Beam and Trellus Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ion Beam and Trellus Health
The main advantage of trading using opposite Ion Beam and Trellus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, Trellus Health 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 Trellus Health will offset losses from the drop in Trellus Health's long position.Ion Beam vs. Adriatic Metals | Ion Beam vs. GreenX Metals | Ion Beam vs. Gamma Communications PLC | Ion Beam vs. Empire Metals Limited |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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