Correlation Between Ion Beam and Onward Medical

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

Diversification Opportunities for Ion Beam and Onward Medical

-0.13

Correlation Coefficient

Ion Beam  Onward Medical

Good diversification

The 3 months correlation between Ion and Onward is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Onward Medical NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onward Medical 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 Onward Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onward Medical NV has no effect on the direction of Ion Beam i.e., Ion Beam and Onward Medical go up and down completely randomly.

Pair Corralation between Ion Beam and Onward Medical

Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 0.99 times more return on investment than Onward Medical. However, Ion Beam Applications is 1.01 times less risky than Onward Medical. It trades about -0.06 of its potential returns per unit of risk. Onward Medical NV is currently generating about -0.35 per unit of risk. If you would invest  1,338  in Ion Beam Applications on December 4, 2024 and sell it today you would lose (38.00) from holding Ion Beam Applications or give up 2.84% of portfolio value over 90 days.

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

Ion Beam Applications  vs.  Onward Medical NV

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 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.

Onward Medical NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Onward Medical NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Onward Medical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ion Beam and Onward Medical

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

The idea behind Ion Beam Applications and Onward Medical 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.