Correlation Between Odfjell Drilling and Ion Beam

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

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

Diversification Opportunities for Odfjell Drilling and Ion Beam

0.77

Correlation Coefficient

Odfjell Drilling  Ion Beam

Poor diversification

The 3 months correlation between Odfjell and Ion is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Drilling 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 Odfjell Drilling 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 Odfjell Drilling 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 Odfjell Drilling i.e., Odfjell Drilling and Ion Beam go up and down completely randomly.

Pair Corralation between Odfjell Drilling and Ion Beam

Assuming the 90 days trading horizon Odfjell Drilling is expected to generate 0.81 times more return on investment than Ion Beam. However, Odfjell Drilling is 1.24 times less risky than Ion Beam. It trades about 0.37 of its potential returns per unit of risk. Ion Beam Applications is currently generating about 0.15 per unit of risk. If you would invest  5,227  in Odfjell Drilling on April 25, 2025 and sell it today you would earn a total of  2,133  from holding Odfjell Drilling or generate 40.81% return on investment over 90 days.

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

Odfjell Drilling  vs.  Ion Beam Applications

Odfjell Drilling

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Odfjell Drilling are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Odfjell Drilling unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ion Beam Applications

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ion Beam Applications are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Ion Beam unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Odfjell Drilling and Ion Beam

The main advantage of trading using opposite Odfjell Drilling and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Drilling 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 Odfjell Drilling 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.