Correlation Between Ion Beam and Ecofin Global

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

Diversification Opportunities for Ion Beam and Ecofin Global

0.61

Correlation Coefficient

Ion Beam  Ecofin Global

Poor diversification

The 3 months correlation between Ion and Ecofin is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities 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 Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of Ion Beam i.e., Ion Beam and Ecofin Global go up and down completely randomly.

Pair Corralation between Ion Beam and Ecofin Global

Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 0.72 times more return on investment than Ecofin Global. However, Ion Beam Applications is 1.39 times less risky than Ecofin Global. It trades about -0.22 of its potential returns per unit of risk. Ecofin Global Utilities is currently generating about -0.17 per unit of risk. If you would invest  1,398  in Ion Beam Applications on September 29, 2024 and sell it today you would lose (63.00) from holding Ion Beam Applications or give up 4.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ion Beam Applications  vs.  Ecofin Global Utilities

Ion Beam Applications

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ion Beam Applications are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ion Beam is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ecofin Global Utilities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecofin Global Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Ion Beam and Ecofin Global

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

The idea behind Ion Beam Applications and Ecofin Global Utilities 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..