Correlation Between Capital Metals and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Capital Metals 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 Capital Metals and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Metals PLC and Ion Beam Applications, you can compare the effects of market volatilities on Capital Metals 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 Capital Metals with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Metals and Ion Beam.
Diversification Opportunities for Capital Metals and Ion Beam
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capital and Ion is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Capital Metals PLC 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 Capital Metals 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 Capital Metals PLC 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 Capital Metals i.e., Capital Metals and Ion Beam go up and down completely randomly.
Pair Corralation between Capital Metals and Ion Beam
Assuming the 90 days trading horizon Capital Metals PLC is expected to under-perform the Ion Beam. In addition to that, Capital Metals is 1.54 times more volatile than Ion Beam Applications. It trades about -0.33 of its total potential returns per unit of risk. Ion Beam Applications is currently generating about -0.1 per unit of volatility. 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 |
Capital Metals PLC vs. Ion Beam Applications
Performance |
| Timeline |
| Capital Metals PLC |
| Ion Beam Applications |
Capital Metals and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Metals and Ion Beam
The main advantage of trading using opposite Capital Metals and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Metals 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.| Capital Metals vs. Givaudan SA | Capital Metals vs. Antofagasta PLC | Capital Metals vs. Ferrexpo PLC | Capital Metals vs. Atalaya Mining |
| Ion Beam vs. Ashtead Technology Holdings | Ion Beam vs. Polar Capital Technology | Ion Beam vs. Cars Inc | Ion Beam vs. Sartorius Stedim Biotech |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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