Correlation Between Ion Beam and Econocom Group
Can any of the company-specific risk be diversified away by investing in both Ion Beam and Econocom Group 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 Econocom Group 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 Econocom Group SANV, you can compare the effects of market volatilities on Ion Beam and Econocom Group 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 Econocom Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Econocom Group.
Diversification Opportunities for Ion Beam and Econocom Group
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ion and Econocom is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Econocom Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Econocom Group SANV 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 Econocom Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Econocom Group SANV has no effect on the direction of Ion Beam i.e., Ion Beam and Econocom Group go up and down completely randomly.
Pair Corralation between Ion Beam and Econocom Group
Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 1.29 times more return on investment than Econocom Group. However, Ion Beam is 1.29 times more volatile than Econocom Group SANV. It trades about 0.01 of its potential returns per unit of risk. Econocom Group SANV is currently generating about -0.05 per unit of risk. If you would invest 1,426 in Ion Beam Applications on August 29, 2024 and sell it today you would lose (44.00) from holding Ion Beam Applications or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ion Beam Applications vs. Econocom Group SANV
Performance |
| Timeline |
| Ion Beam Applications |
| Econocom Group SANV |
Ion Beam and Econocom Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Econocom Group
The main advantage of trading using opposite Ion Beam and Econocom Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, Econocom Group 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 Econocom Group will offset losses from the drop in Econocom Group's long position.| Ion Beam vs. EVS Broadcast Equipment | Ion Beam vs. NV Bekaert SA | Ion Beam vs. Melexis NV | Ion Beam vs. Barco NV |
| Econocom Group vs. NV Bekaert SA | Econocom Group vs. EVS Broadcast Equipment | Econocom Group vs. Ontex Group NV | Econocom Group vs. Tessenderlo |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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