Correlation Between Vitec Software and Ion Beam

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

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

Diversification Opportunities for Vitec Software and Ion Beam

-0.47

Correlation Coefficient

Vitec Software  Ion Beam

Very good diversification

The 3 months correlation between Vitec and Ion is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group 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 Vitec Software 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 Vitec Software Group 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 Vitec Software i.e., Vitec Software and Ion Beam go up and down completely randomly.

Pair Corralation between Vitec Software and Ion Beam

Assuming the 90 days trading horizon Vitec Software is expected to generate 24.68 times less return on investment than Ion Beam. But when comparing it to its historical volatility, Vitec Software Group is 1.27 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 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,120  in Ion Beam Applications on September 5, 2024 and sell it today you would earn a total of  264.00  from holding Ion Beam Applications or generate 23.57% return on investment over 90 days.

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

Vitec Software Group  vs.  Ion Beam Applications

Vitec Software Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vitec Software Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Vitec Software is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Ion Beam Applications

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ion Beam Applications are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ion Beam unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vitec Software and Ion Beam

The main advantage of trading using opposite Vitec Software and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitec Software 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 Vitec Software Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.