Correlation Between Interlink Electronics and ASSA ABLOY
Can any of the company-specific risk be diversified away by investing in both Interlink Electronics and ASSA ABLOY 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 Electronics and ASSA ABLOY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlink Electronics and ASSA ABLOY AB, you can compare the effects of market volatilities on Interlink Electronics and ASSA ABLOY 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 Electronics with a short position of ASSA ABLOY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlink Electronics and ASSA ABLOY.
Diversification Opportunities for Interlink Electronics and ASSA ABLOY
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Interlink and ASSA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Interlink Electronics and ASSA ABLOY AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSA ABLOY AB and Interlink Electronics 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 Electronics are associated (or correlated) with ASSA ABLOY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSA ABLOY AB has no effect on the direction of Interlink Electronics i.e., Interlink Electronics and ASSA ABLOY go up and down completely randomly.
Pair Corralation between Interlink Electronics and ASSA ABLOY
Given the investment horizon of 90 days Interlink Electronics is expected to generate 3.24 times more return on investment than ASSA ABLOY. However, Interlink Electronics is 3.24 times more volatile than ASSA ABLOY AB. It trades about 0.08 of its potential returns per unit of risk. ASSA ABLOY AB is currently generating about 0.0 per unit of risk. If you would invest 397.00 in Interlink Electronics on September 2, 2024 and sell it today you would earn a total of 97.00 from holding Interlink Electronics or generate 24.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Interlink Electronics vs. ASSA ABLOY AB
Performance |
| Timeline |
| Interlink Electronics |
| ASSA ABLOY AB |
Interlink Electronics and ASSA ABLOY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interlink Electronics and ASSA ABLOY
The main advantage of trading using opposite Interlink Electronics and ASSA ABLOY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlink Electronics position performs unexpectedly, ASSA ABLOY 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 ASSA ABLOY will offset losses from the drop in ASSA ABLOY's long position.| Interlink Electronics vs. Methode Electronics | Interlink Electronics vs. Bel Fuse A | Interlink Electronics vs. CTS Corporation | Interlink Electronics vs. MicroCloud Hologram |
| ASSA ABLOY vs. Bridger Aerospace Group | ASSA ABLOY vs. ATWEC Technologies | ASSA ABLOY vs. Assa Abloy AB | ASSA ABLOY vs. Brinks Company |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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