Correlation Between Keyware Technologies and Ion Beam

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

By analyzing existing cross correlation between Keyware Technologies NV and Ion Beam Applications, you can compare the effects of market volatilities on Keyware Technologies and Ion Beam 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 Keyware Technologies with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyware Technologies and Ion Beam.

Diversification Opportunities for Keyware Technologies and Ion Beam

0.43

Correlation Coefficient

Keyware Technologies  Ion Beam

Very weak diversification

The 3 months correlation between Keyware and Ion is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Keyware Technologies NV and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications and Keyware Technologies 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 Keyware Technologies NV are associated (or correlated) with Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Keyware Technologies i.e., Keyware Technologies and Ion Beam go up and down completely randomly.

Pair Corralation between Keyware Technologies and Ion Beam

Assuming the 90 days trading horizon Keyware Technologies NV is expected to generate 1.05 times more return on investment than Ion Beam. However, Keyware Technologies is 1.05 times more volatile than Ion Beam Applications. It trades about 0.01 of its potential returns per unit of risk. Ion Beam Applications is currently generating about -0.11 per unit of risk. If you would invest  78.00  in Keyware Technologies NV on December 30, 2024 and sell it today you would earn a total of  0.00  from holding Keyware Technologies NV or generate 0.0% return on investment over 90 days.

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

Keyware Technologies NV  vs.  Ion Beam Applications

Keyware Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyware Technologies NV has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Keyware Technologies is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

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.

Pair Trading with Keyware Technologies and Ion Beam

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

The idea behind Keyware Technologies NV and Ion Beam Applications 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.