Correlation Between GoldMining and Ion Beam
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Ion Beam Applications, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Ion Beam.
Diversification Opportunities for GoldMining and Ion Beam
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GoldMining and Ion is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining 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 GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Ion Beam go up and down completely randomly.
Pair Corralation between GoldMining and Ion Beam
Assuming the 90 days trading horizon GoldMining is expected to under-perform the Ion Beam. In addition to that, GoldMining is 1.05 times more volatile than Ion Beam Applications. It trades about -0.07 of its total potential returns per unit of risk. Ion Beam Applications is currently generating about 0.01 per unit of volatility. If you would invest 1,343 in Ion Beam Applications on September 26, 2024 and sell it today you would lose (4.00) from holding Ion Beam Applications or give up 0.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 71.88% |
Values | Daily Returns |
GoldMining vs. Ion Beam Applications
Performance |
Timeline |
GoldMining |
Ion Beam Applications |
GoldMining and Ion Beam Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GoldMining and Ion Beam
The main advantage of trading using opposite GoldMining and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.GoldMining vs. Uniper SE | GoldMining vs. Mulberry Group PLC | GoldMining vs. London Security Plc | GoldMining vs. Triad Group 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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