Correlation Between GSTechnologies and Ion Beam
Can any of the company-specific risk be diversified away by investing in both GSTechnologies 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 GSTechnologies and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GSTechnologies and Ion Beam Applications, you can compare the effects of market volatilities on GSTechnologies 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 GSTechnologies with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of GSTechnologies and Ion Beam.
Diversification Opportunities for GSTechnologies and Ion Beam
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GSTechnologies and Ion is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding GSTechnologies 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 GSTechnologies 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 GSTechnologies 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 GSTechnologies i.e., GSTechnologies and Ion Beam go up and down completely randomly.
Pair Corralation between GSTechnologies and Ion Beam
Assuming the 90 days trading horizon GSTechnologies is expected to generate 4.43 times more return on investment than Ion Beam. However, GSTechnologies is 4.43 times more volatile than Ion Beam Applications. It trades about 0.22 of its potential returns per unit of risk. Ion Beam Applications is currently generating about -0.11 per unit of risk. If you would invest 138.00 in GSTechnologies on September 24, 2024 and sell it today you would earn a total of 40.00 from holding GSTechnologies or generate 28.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GSTechnologies vs. Ion Beam Applications
Performance |
| Timeline |
| GSTechnologies |
| Ion Beam Applications |
GSTechnologies and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GSTechnologies and Ion Beam
The main advantage of trading using opposite GSTechnologies and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GSTechnologies 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.| GSTechnologies vs. Ion Beam Applications | GSTechnologies vs. Amedeo Air Four | GSTechnologies vs. Fair Oaks Income | GSTechnologies vs. LBG Media PLC |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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