Correlation Between Brederode and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Brederode and Ion Beam 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 Brederode and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brederode SA and Ion Beam Applications, you can compare the effects of market volatilities on Brederode and Ion Beam 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 Brederode with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brederode and Ion Beam.
Diversification Opportunities for Brederode and Ion Beam
Weak diversification
The 3 months correlation between Brederode and Ion is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Brederode SA and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications and Brederode 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 Brederode SA are associated (or correlated) with Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Brederode i.e., Brederode and Ion Beam go up and down completely randomly.
Pair Corralation between Brederode and Ion Beam
Assuming the 90 days trading horizon Brederode is expected to generate 1.73 times less return on investment than Ion Beam. But when comparing it to its historical volatility, Brederode SA is 1.95 times less risky than Ion Beam. It trades about 0.01 of its potential returns per unit of risk. Ion Beam Applications is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,514 in Ion Beam Applications on September 3, 2024 and sell it today you would lose (118.00) from holding Ion Beam Applications or give up 7.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brederode SA vs. Ion Beam Applications
Performance |
| Timeline |
| Brederode SA |
| Ion Beam Applications |
Brederode and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brederode and Ion Beam
The main advantage of trading using opposite Brederode and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brederode position performs unexpectedly, Ion Beam 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 Ion Beam will offset losses from the drop in Ion Beam's long position.| Brederode vs. Ion Beam Applications | Brederode vs. EVS Broadcast Equipment | Brederode vs. Keyware Technologies NV | Brederode vs. Vastned Retail Belgium |
| Ion Beam vs. EVS Broadcast Equipment | Ion Beam vs. NV Bekaert SA | Ion Beam vs. Melexis NV | Ion Beam vs. Barco NV |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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