Correlation Between Advanced Energy and Ilika Plc
Can any of the company-specific risk be diversified away by investing in both Advanced Energy and Ilika Plc 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 Advanced Energy and Ilika Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Energy Industries and Ilika plc, you can compare the effects of market volatilities on Advanced Energy and Ilika Plc 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 Advanced Energy with a short position of Ilika Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Energy and Ilika Plc.
Diversification Opportunities for Advanced Energy and Ilika Plc
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advanced and Ilika is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Energy Industries and Ilika plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilika plc and Advanced Energy 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 Advanced Energy Industries are associated (or correlated) with Ilika Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilika plc has no effect on the direction of Advanced Energy i.e., Advanced Energy and Ilika Plc go up and down completely randomly.
Pair Corralation between Advanced Energy and Ilika Plc
Given the investment horizon of 90 days Advanced Energy is expected to generate 1.93 times less return on investment than Ilika Plc. But when comparing it to its historical volatility, Advanced Energy Industries is 3.48 times less risky than Ilika Plc. It trades about 0.16 of its potential returns per unit of risk. Ilika plc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Ilika plc on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Ilika plc or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Energy Industries vs. Ilika plc
Performance |
| Timeline |
| Advanced Energy Indu |
| Ilika plc |
Advanced Energy and Ilika Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Energy and Ilika Plc
The main advantage of trading using opposite Advanced Energy and Ilika Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Energy position performs unexpectedly, Ilika Plc 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 Ilika Plc will offset losses from the drop in Ilika Plc's long position.| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
| Ilika Plc vs. Novonix Ltd ADR | Ilika Plc vs. Magnis Energy Technologies | Ilika Plc vs. Exro Technologies | Ilika Plc vs. FuelPositive Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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