Correlation Between Keyware Technologies and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Keyware Technologies 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 Keyware Technologies and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyware Technologies NV and Ion Beam Applications, you can compare the effects of market volatilities on Keyware Technologies 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 Keyware Technologies with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyware Technologies and Ion Beam.
Diversification Opportunities for Keyware Technologies and Ion Beam
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Keyware and Ion is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Keyware Technologies NV 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 Keyware Technologies 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 Keyware Technologies NV 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 Keyware Technologies i.e., Keyware Technologies and Ion Beam go up and down completely randomly.
Pair Corralation between Keyware Technologies and Ion Beam
Assuming the 90 days trading horizon Keyware Technologies NV is expected to generate 1.08 times more return on investment than Ion Beam. However, Keyware Technologies is 1.08 times more volatile than Ion Beam Applications. It trades about 0.07 of its potential returns per unit of risk. Ion Beam Applications is currently generating about -0.05 per unit of risk. If you would invest 78.00 in Keyware Technologies NV on November 5, 2024 and sell it today you would earn a total of 2.00 from holding Keyware Technologies NV or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyware Technologies NV vs. Ion Beam Applications
Performance |
| Timeline |
| Keyware Technologies |
| Ion Beam Applications |
Keyware Technologies and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyware Technologies and Ion Beam
The main advantage of trading using opposite Keyware Technologies and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyware Technologies 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.| Keyware Technologies vs. Crescent NV | Keyware Technologies vs. Ion Beam Applications | Keyware Technologies vs. Nyrstar NV | Keyware Technologies vs. AGFA Gevaert NV |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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