Correlation Between Ion Beam and Panasonic Corp

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

Diversification Opportunities for Ion Beam and Panasonic Corp

-0.45

Correlation Coefficient

Ion Beam  Panasonic Corp

Very good diversification

The 3 months correlation between Ion and Panasonic is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Panasonic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panasonic Corp 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 Panasonic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panasonic Corp has no effect on the direction of Ion Beam i.e., Ion Beam and Panasonic Corp go up and down completely randomly.

Pair Corralation between Ion Beam and Panasonic Corp

Assuming the 90 days trading horizon Ion Beam Applications is expected to under-perform the Panasonic Corp. But the stock apears to be less risky and, when comparing its historical volatility, Ion Beam Applications is 1.4 times less risky than Panasonic Corp. The stock trades about -0.1 of its potential returns per unit of risk. The Panasonic Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  161,900  in Panasonic Corp on December 23, 2024 and sell it today you would earn a total of  26,900  from holding Panasonic Corp or generate 16.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	53.97%
Values	Daily Returns

Ion Beam Applications  vs.  Panasonic Corp

Ion Beam Applications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ion Beam Applications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Panasonic Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Panasonic Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Panasonic Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ion Beam and Panasonic Corp

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

The idea behind Ion Beam Applications and Panasonic Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.