Correlation Between Empire Metals and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Empire 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 Empire 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 Empire Metals Limited and Ion Beam Applications, you can compare the effects of market volatilities on Empire 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 Empire Metals with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Metals and Ion Beam.
Diversification Opportunities for Empire Metals and Ion Beam
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Empire and Ion is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Empire Metals Limited 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 Empire 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 Empire Metals Limited 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 Empire Metals i.e., Empire Metals and Ion Beam go up and down completely randomly.
Pair Corralation between Empire Metals and Ion Beam
Assuming the 90 days trading horizon Empire Metals Limited is expected to generate 1.57 times more return on investment than Ion Beam. However, Empire Metals is 1.57 times more volatile than Ion Beam Applications. It trades about 0.21 of its potential returns per unit of risk. Ion Beam Applications is currently generating about -0.27 per unit of risk. If you would invest 980.00 in Empire Metals Limited on January 1, 2025 and sell it today you would earn a total of 195.00 from holding Empire Metals Limited or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Empire Metals Limited vs. Ion Beam Applications
Performance |
| Timeline |
| Empire Metals Limited |
| Ion Beam Applications |
Empire Metals and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Metals and Ion Beam
The main advantage of trading using opposite Empire Metals and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire 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.| Empire Metals vs. Impax Environmental Markets | Empire Metals vs. Seche Environnement SA | Empire Metals vs. Check Point Software | Empire Metals vs. Dentsply Sirona |
| Ion Beam vs. Samsung Electronics Co | Ion Beam vs. Toyota Motor Corp | Ion Beam vs. State Bank of | Ion Beam vs. SoftBank Group Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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