Correlation Between Ion Beam and EVS Broadcast

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

Diversification Opportunities for Ion Beam and EVS Broadcast

-0.53

Correlation Coefficient

Ion Beam  EVS Broadcast

Excellent diversification

The 3 months correlation between Ion and EVS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and EVS Broadcast Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVS Broadcast Equipment 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 EVS Broadcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVS Broadcast Equipment has no effect on the direction of Ion Beam i.e., Ion Beam and EVS Broadcast go up and down completely randomly.

Pair Corralation between Ion Beam and EVS Broadcast

Assuming the 90 days trading horizon Ion Beam Applications is expected to under-perform the EVS Broadcast. In addition to that, Ion Beam is 1.39 times more volatile than EVS Broadcast Equipment. It trades about -0.11 of its total potential returns per unit of risk. EVS Broadcast Equipment is currently generating about 0.2 per unit of volatility. If you would invest  3,090  in EVS Broadcast Equipment on December 28, 2024 and sell it today you would earn a total of  705.00  from holding EVS Broadcast Equipment or generate 22.82% return on investment over 90 days.

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

Ion Beam Applications  vs.  EVS Broadcast Equipment

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. 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 April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

EVS Broadcast Equipment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EVS Broadcast Equipment are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, EVS Broadcast reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ion Beam and EVS Broadcast

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

The idea behind Ion Beam Applications and EVS Broadcast Equipment 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.