Correlation Between Ion Beam and GlobalData PLC

Can any of the company-specific risk be diversified away by investing in both Ion Beam and GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC, you can compare the effects of market volatilities on Ion Beam and GlobalData PLC 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and GlobalData PLC.

Diversification Opportunities for Ion Beam and GlobalData PLC

-0.72

Correlation Coefficient

Ion Beam  GlobalData PLC

Pay attention - limited upside

The 3 months correlation between Ion and GlobalData is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Ion Beam i.e., Ion Beam and GlobalData PLC go up and down completely randomly.

Pair Corralation between Ion Beam and GlobalData PLC

Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 1.67 times more return on investment than GlobalData PLC. However, Ion Beam is 1.67 times more volatile than GlobalData PLC. It trades about 0.12 of its potential returns per unit of risk. GlobalData PLC is currently generating about -0.06 per unit of risk. If you would invest  1,109  in Ion Beam Applications on September 4, 2024 and sell it today you would earn a total of  265.00  from holding Ion Beam Applications or generate 23.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Ion Beam Applications  vs.  GlobalData PLC

Ion Beam Applications

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ion Beam Applications are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ion Beam unveiled solid returns over the last few months and may actually be approaching a breakup point.

GlobalData PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GlobalData PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ion Beam and GlobalData PLC

The main advantage of trading using opposite Ion Beam and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, GlobalData PLC 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 GlobalData PLC will offset losses from the drop in GlobalData PLC's long position.

The idea behind Ion Beam Applications and GlobalData PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.