Correlation Between Interlink Electronics and Integrated Media
Can any of the company-specific risk be diversified away by investing in both Interlink Electronics and Integrated Media 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 Integrated Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interlink Electronics and Integrated Media Technology, you can compare the effects of market volatilities on Interlink Electronics and Integrated Media 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 Integrated Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlink Electronics and Integrated Media.
Diversification Opportunities for Interlink Electronics and Integrated Media
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Interlink and Integrated is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Interlink Electronics and Integrated Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Media Tec 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 Integrated Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Media Tec has no effect on the direction of Interlink Electronics i.e., Interlink Electronics and Integrated Media go up and down completely randomly.
Pair Corralation between Interlink Electronics and Integrated Media
Given the investment horizon of 90 days Interlink Electronics is expected to generate 1.81 times more return on investment than Integrated Media. However, Interlink Electronics is 1.81 times more volatile than Integrated Media Technology. It trades about 0.29 of its potential returns per unit of risk. Integrated Media Technology is currently generating about 0.02 per unit of risk. If you would invest 612.00 in Interlink Electronics on November 3, 2024 and sell it today you would earn a total of 351.00 from holding Interlink Electronics or generate 57.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interlink Electronics vs. Integrated Media Technology
Performance |
| Timeline |
| Interlink Electronics |
| Integrated Media Tec |
Interlink Electronics and Integrated Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interlink Electronics and Integrated Media
The main advantage of trading using opposite Interlink Electronics and Integrated Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interlink Electronics position performs unexpectedly, Integrated Media 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 Integrated Media will offset losses from the drop in Integrated Media's long position.| Interlink Electronics vs. Methode Electronics | Interlink Electronics vs. Bel Fuse A | Interlink Electronics vs. CTS Corporation | Interlink Electronics vs. MicroCloud Hologram |
| Integrated Media vs. SigmaTron International | Integrated Media vs. Data IO | Integrated Media vs. Research Frontiers Incorporated | Integrated Media vs. Maris Tech |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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