Correlation Between Ion Beam and Kingfisher PLC

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

Diversification Opportunities for Ion Beam and Kingfisher PLC

0.04

Correlation Coefficient

Ion Beam  Kingfisher PLC

Significant diversification

The 3 months correlation between Ion and Kingfisher is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Kingfisher PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingfisher PLC 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 Kingfisher PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingfisher PLC has no effect on the direction of Ion Beam i.e., Ion Beam and Kingfisher PLC go up and down completely randomly.

Pair Corralation between Ion Beam and Kingfisher PLC

Assuming the 90 days trading horizon Ion Beam is expected to generate 42.08 times less return on investment than Kingfisher PLC. In addition to that, Ion Beam is 1.29 times more volatile than Kingfisher PLC. It trades about 0.0 of its total potential returns per unit of risk. Kingfisher PLC is currently generating about 0.03 per unit of volatility. If you would invest  21,383  in Kingfisher PLC on September 16, 2024 and sell it today you would earn a total of  4,527  from holding Kingfisher PLC or generate 21.17% return on investment over 90 days.

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

Ion Beam Applications  vs.  Kingfisher PLC

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. 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.

Kingfisher PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingfisher PLC 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 Kingfisher PLC

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

The idea behind Ion Beam Applications and Kingfisher PLC 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.