Correlation Between Ioneer and BAKER

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

By analyzing existing cross correlation between ioneer Ltd American and BAKER HUGHES A, you can compare the effects of market volatilities on Ioneer and BAKER 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 Ioneer with a short position of BAKER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ioneer and BAKER.

Diversification Opportunities for Ioneer and BAKER

0.23

Correlation Coefficient

Ioneer  BAKER

Modest diversification

The 3 months correlation between Ioneer and BAKER is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ioneer Ltd American and BAKER HUGHES A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKER HUGHES A and Ioneer 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 ioneer Ltd American are associated (or correlated) with BAKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKER HUGHES A has no effect on the direction of Ioneer i.e., Ioneer and BAKER go up and down completely randomly.

Pair Corralation between Ioneer and BAKER

Given the investment horizon of 90 days ioneer Ltd American is expected to under-perform the BAKER. In addition to that, Ioneer is 11.89 times more volatile than BAKER HUGHES A. It trades about -0.03 of its total potential returns per unit of risk. BAKER HUGHES A is currently generating about 0.0 per unit of volatility. If you would invest  9,465  in BAKER HUGHES A on October 8, 2024 and sell it today you would lose (114.00) from holding BAKER HUGHES A or give up 1.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

ioneer Ltd American  vs.  BAKER HUGHES A

ioneer American

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ioneer Ltd American has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile 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.

BAKER HUGHES A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAKER HUGHES A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BAKER is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ioneer and BAKER

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

The idea behind ioneer Ltd American and BAKER HUGHES A 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.