Correlation Between Interflex and Wireless Power
Can any of the company-specific risk be diversified away by investing in both Interflex and Wireless Power 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 Interflex and Wireless Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interflex Co and Wireless Power Amplifier, you can compare the effects of market volatilities on Interflex and Wireless Power 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 Interflex with a short position of Wireless Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interflex and Wireless Power.
Diversification Opportunities for Interflex and Wireless Power
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Interflex and Wireless is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Interflex Co and Wireless Power Amplifier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Power Amplifier and Interflex 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 Interflex Co are associated (or correlated) with Wireless Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Power Amplifier has no effect on the direction of Interflex i.e., Interflex and Wireless Power go up and down completely randomly.
Pair Corralation between Interflex and Wireless Power
Assuming the 90 days trading horizon Interflex Co is expected to generate 0.59 times more return on investment than Wireless Power. However, Interflex Co is 1.69 times less risky than Wireless Power. It trades about 0.15 of its potential returns per unit of risk. Wireless Power Amplifier is currently generating about -0.04 per unit of risk. If you would invest 867,000 in Interflex Co on December 3, 2024 and sell it today you would earn a total of 73,000 from holding Interflex Co or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interflex Co vs. Wireless Power Amplifier
Performance |
| Timeline |
| Interflex |
| Wireless Power Amplifier |
Interflex and Wireless Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interflex and Wireless Power
The main advantage of trading using opposite Interflex and Wireless Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interflex position performs unexpectedly, Wireless Power 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 Wireless Power will offset losses from the drop in Wireless Power's long position.The idea behind Interflex Co and Wireless Power Amplifier 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.| Wireless Power vs. Formetal Co | Wireless Power vs. Duksan Hi Metal | Wireless Power vs. Daejung Chemicals Metals | Wireless Power vs. PJ Metal Co |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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