Correlation Between Interlink Communication and BEC World
Can any of the company-specific risk be diversified away by investing in both Interlink Communication and BEC World 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 Interlink Communication and BEC World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlink Communication Public and BEC World Public, you can compare the effects of market volatilities on Interlink Communication and BEC World 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 Interlink Communication with a short position of BEC World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlink Communication and BEC World.
Diversification Opportunities for Interlink Communication and BEC World
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Interlink and BEC is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Interlink Communication Public and BEC World Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEC World Public and Interlink Communication 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 Interlink Communication Public are associated (or correlated) with BEC World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEC World Public has no effect on the direction of Interlink Communication i.e., Interlink Communication and BEC World go up and down completely randomly.
Pair Corralation between Interlink Communication and BEC World
Assuming the 90 days trading horizon Interlink Communication Public is expected to generate 1.29 times more return on investment than BEC World. However, Interlink Communication is 1.29 times more volatile than BEC World Public. It trades about -0.1 of its potential returns per unit of risk. BEC World Public is currently generating about -0.16 per unit of risk. If you would invest 615.00 in Interlink Communication Public on September 2, 2024 and sell it today you would lose (30.00) from holding Interlink Communication Public or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interlink Communication Public vs. BEC World Public
Performance |
| Timeline |
| Interlink Communication |
| BEC World Public |
Interlink Communication and BEC World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interlink Communication and BEC World
The main advantage of trading using opposite Interlink Communication and BEC World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlink Communication position performs unexpectedly, BEC World 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 BEC World will offset losses from the drop in BEC World's long position.| Interlink Communication vs. AP Public | Interlink Communication vs. Jasmine International Public | Interlink Communication vs. Asia Plus Group | Interlink Communication vs. Bangchak Public |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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