Correlation Between Ionet and Aston Martin

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

By analyzing existing cross correlation between ionet and Aston Martin Lagonda, you can compare the effects of market volatilities on Ionet and Aston Martin 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 Ionet with a short position of Aston Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ionet and Aston Martin.

Diversification Opportunities for Ionet and Aston Martin

0.25

Correlation Coefficient

Ionet  Aston Martin

Modest diversification

The 3 months correlation between Ionet and Aston is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ionet and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda and Ionet 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 ionet are associated (or correlated) with Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of Ionet i.e., Ionet and Aston Martin go up and down completely randomly.

Pair Corralation between Ionet and Aston Martin

Assuming the 90 days horizon ionet is expected to under-perform the Aston Martin. In addition to that, Ionet is 2.11 times more volatile than Aston Martin Lagonda. It trades about -0.2 of its total potential returns per unit of risk. Aston Martin Lagonda is currently generating about -0.08 per unit of volatility. If you would invest  130.00  in Aston Martin Lagonda on December 20, 2024 and sell it today you would lose (24.00) from holding Aston Martin Lagonda or give up 18.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.19%
Values	Daily Returns

ionet  vs.  Aston Martin Lagonda

ionet

Risk-Adjusted Performance

Very Weak

Over the last 90 days ionet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for ionet shareholders.

Aston Martin Lagonda

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aston Martin Lagonda has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ionet and Aston Martin

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

The idea behind ionet and Aston Martin Lagonda 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.