Correlation Between Ebang International and Interlink Electronics
Can any of the company-specific risk be diversified away by investing in both Ebang International and Interlink Electronics 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 Ebang International and Interlink Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebang International Holdings and Interlink Electronics, you can compare the effects of market volatilities on Ebang International and Interlink Electronics 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 Ebang International with a short position of Interlink Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebang International and Interlink Electronics.
Diversification Opportunities for Ebang International and Interlink Electronics
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ebang and Interlink is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ebang International Holdings and Interlink Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Electronics and Ebang International 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 Ebang International Holdings are associated (or correlated) with Interlink Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Electronics has no effect on the direction of Ebang International i.e., Ebang International and Interlink Electronics go up and down completely randomly.
Pair Corralation between Ebang International and Interlink Electronics
Given the investment horizon of 90 days Ebang International Holdings is expected to generate 0.88 times more return on investment than Interlink Electronics. However, Ebang International Holdings is 1.14 times less risky than Interlink Electronics. It trades about -0.03 of its potential returns per unit of risk. Interlink Electronics is currently generating about -0.03 per unit of risk. If you would invest 1,151 in Ebang International Holdings on August 27, 2024 and sell it today you would lose (414.00) from holding Ebang International Holdings or give up 35.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebang International Holdings vs. Interlink Electronics
Performance |
| Timeline |
| Ebang International |
| Interlink Electronics |
Ebang International and Interlink Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebang International and Interlink Electronics
The main advantage of trading using opposite Ebang International and Interlink Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebang International position performs unexpectedly, Interlink Electronics 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 Interlink Electronics will offset losses from the drop in Interlink Electronics' long position.| Ebang International vs. Plexus Corp | Ebang International vs. Benchmark Electronics | Ebang International vs. Jabil Circuit | Ebang International vs. Sanmina |
| Interlink Electronics vs. Methode Electronics | Interlink Electronics vs. Bel Fuse A | Interlink Electronics vs. CTS Corporation | Interlink Electronics vs. MicroCloud Hologram |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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