Correlation Between Ion Beam and Barco NV

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

Diversification Opportunities for Ion Beam and Barco NV

-0.06

Correlation Coefficient

Ion Beam  Barco NV

Good diversification

The 3 months correlation between Ion and Barco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Barco NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barco NV 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 Barco NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barco NV has no effect on the direction of Ion Beam i.e., Ion Beam and Barco NV go up and down completely randomly.

Pair Corralation between Ion Beam and Barco NV

Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 1.39 times more return on investment than Barco NV. However, Ion Beam is 1.39 times more volatile than Barco NV. It trades about 0.04 of its potential returns per unit of risk. Barco NV is currently generating about -0.07 per unit of risk. If you would invest  1,274  in Ion Beam Applications on September 19, 2024 and sell it today you would earn a total of  18.00  from holding Ion Beam Applications or generate 1.41% return on investment over 90 days.

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

Ion Beam Applications  vs.  Barco NV

Ion Beam Applications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ion Beam Applications has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Ion Beam is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Barco NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barco NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Ion Beam and Barco NV

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

The idea behind Ion Beam Applications and Barco NV 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.