Correlation Between Sofina Socit and Ion Beam

Can any of the company-specific risk be diversified away by investing in both Sofina Socit 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 Sofina Socit and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sofina Socit Anonyme and Ion Beam Applications, you can compare the effects of market volatilities on Sofina Socit 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 Sofina Socit with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sofina Socit and Ion Beam.

Diversification Opportunities for Sofina Socit and Ion Beam

0.23

Correlation Coefficient

Sofina Socit  Ion Beam

Modest diversification

The 3 months correlation between Sofina and Ion is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme 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 Sofina Socit 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 Sofina Socit Anonyme 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 Sofina Socit i.e., Sofina Socit and Ion Beam go up and down completely randomly.

Pair Corralation between Sofina Socit and Ion Beam

Assuming the 90 days trading horizon Sofina Socit is expected to generate 32.72 times less return on investment than Ion Beam. But when comparing it to its historical volatility, Sofina Socit Anonyme is 1.62 times less risky than Ion Beam. It trades about 0.01 of its potential returns per unit of risk. Ion Beam Applications is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,128  in Ion Beam Applications on August 31, 2024 and sell it today you would earn a total of  272.00  from holding Ion Beam Applications or generate 24.11% return on investment over 90 days.

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

Sofina Socit Anonyme  vs.  Ion Beam Applications

Sofina Socit Anonyme

Risk-Adjusted Performance

0 of 100

Very Weak

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

Ion Beam Applications

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ion Beam Applications are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Ion Beam reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sofina Socit and Ion Beam

The main advantage of trading using opposite Sofina Socit and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Socit 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.

The idea behind Sofina Socit Anonyme and Ion Beam Applications 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.