Correlation Between Ieh Corp and Interlink Electronics
Can any of the company-specific risk be diversified away by investing in both Ieh Corp 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 Ieh Corp and Interlink Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ieh Corp and Interlink Electronics, you can compare the effects of market volatilities on Ieh Corp 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 Ieh Corp with a short position of Interlink Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ieh Corp and Interlink Electronics.
Diversification Opportunities for Ieh Corp and Interlink Electronics
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ieh and Interlink is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ieh Corp and Interlink Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Electronics and Ieh Corp 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 Ieh Corp 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 Ieh Corp i.e., Ieh Corp and Interlink Electronics go up and down completely randomly.
Pair Corralation between Ieh Corp and Interlink Electronics
Given the investment horizon of 90 days Ieh Corp is expected to generate 3.69 times less return on investment than Interlink Electronics. But when comparing it to its historical volatility, Ieh Corp is 1.36 times less risky than Interlink Electronics. It trades about 0.06 of its potential returns per unit of risk. Interlink Electronics is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 343.00 in Interlink Electronics on October 31, 2024 and sell it today you would earn a total of 513.00 from holding Interlink Electronics or generate 149.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ieh Corp vs. Interlink Electronics
Performance |
| Timeline |
| Ieh Corp |
| Interlink Electronics |
Ieh Corp and Interlink Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ieh Corp and Interlink Electronics
The main advantage of trading using opposite Ieh Corp and Interlink Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ieh Corp 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.| Ieh Corp vs. LGL Group | Ieh Corp vs. Deswell Industries | Ieh Corp vs. M tron Industries | Ieh Corp vs. Ostin Technology Group |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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