Correlation Between Ion Beam and AGFA Gevaert

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

Diversification Opportunities for Ion Beam and AGFA Gevaert

0.57

Correlation Coefficient

Ion Beam  AGFA Gevaert

Very weak diversification

The 3 months correlation between Ion and AGFA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and AGFA Gevaert NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGFA Gevaert 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 AGFA Gevaert. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGFA Gevaert NV has no effect on the direction of Ion Beam i.e., Ion Beam and AGFA Gevaert go up and down completely randomly.

Pair Corralation between Ion Beam and AGFA Gevaert

Assuming the 90 days trading horizon Ion Beam Applications is expected to under-perform the AGFA Gevaert. But the stock apears to be less risky and, when comparing its historical volatility, Ion Beam Applications is 1.83 times less risky than AGFA Gevaert. The stock trades about -0.1 of its potential returns per unit of risk. The AGFA Gevaert NV is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  66.00  in AGFA Gevaert NV on October 20, 2024 and sell it today you would earn a total of  10.00  from holding AGFA Gevaert NV or generate 15.15% return on investment over 90 days.

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

Ion Beam Applications  vs.  AGFA Gevaert 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 latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

AGFA Gevaert NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGFA Gevaert 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 February 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 AGFA Gevaert

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

The idea behind Ion Beam Applications and AGFA Gevaert 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.