Correlation Between Flux Power and Ilika Plc
Can any of the company-specific risk be diversified away by investing in both Flux Power 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 Flux Power and Ilika Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flux Power Holdings and Ilika plc, you can compare the effects of market volatilities on Flux Power 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 Flux Power with a short position of Ilika Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flux Power and Ilika Plc.
Diversification Opportunities for Flux Power and Ilika Plc
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flux and Ilika is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Flux Power Holdings and Ilika plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilika plc and Flux Power 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 Flux Power Holdings 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 Flux Power i.e., Flux Power and Ilika Plc go up and down completely randomly.
Pair Corralation between Flux Power and Ilika Plc
Given the investment horizon of 90 days Flux Power Holdings is expected to under-perform the Ilika Plc. But the stock apears to be less risky and, when comparing its historical volatility, Flux Power Holdings is 1.16 times less risky than Ilika Plc. The stock trades about -0.3 of its potential returns per unit of risk. The Ilika plc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Ilika plc on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Ilika plc or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flux Power Holdings vs. Ilika plc
Performance |
| Timeline |
| Flux Power Holdings |
| Ilika plc |
Flux Power and Ilika Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flux Power and Ilika Plc
The main advantage of trading using opposite Flux Power and Ilika Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flux Power 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.| Flux Power vs. Espey Mfg Electronics | Flux Power vs. NeoVolta Warrant | Flux Power vs. Kimball Electronics | Flux Power vs. Hayward Holdings |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |