Correlation Between Silkbank and Air Link
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By analyzing existing cross correlation between Silkbank and Air Link Communication, you can compare the effects of market volatilities on Silkbank and Air Link 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 Silkbank with a short position of Air Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silkbank and Air Link.
Diversification Opportunities for Silkbank and Air Link
Very poor diversification
The 3 months correlation between Silkbank and Air is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Silkbank and Air Link Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Link Communication and Silkbank 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 Silkbank are associated (or correlated) with Air Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Link Communication has no effect on the direction of Silkbank i.e., Silkbank and Air Link go up and down completely randomly.
Pair Corralation between Silkbank and Air Link
Assuming the 90 days trading horizon Silkbank is expected to generate 0.64 times more return on investment than Air Link. However, Silkbank is 1.56 times less risky than Air Link. It trades about -0.09 of its potential returns per unit of risk. Air Link Communication is currently generating about -0.16 per unit of risk. If you would invest 104.00 in Silkbank on November 4, 2024 and sell it today you would lose (4.00) from holding Silkbank or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silkbank vs. Air Link Communication
Performance |
| Timeline |
| Silkbank |
| Air Link Communication |
Silkbank and Air Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silkbank and Air Link
The main advantage of trading using opposite Silkbank and Air Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silkbank position performs unexpectedly, Air Link 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 Air Link will offset losses from the drop in Air Link's long position.| Silkbank vs. Data Agro | Silkbank vs. IBL HealthCare | Silkbank vs. Air Link Communication | Silkbank vs. Ittehad Chemicals |
| Air Link vs. First Fidelity Leasing | Air Link vs. Grays Leasing | Air Link vs. Crescent Steel Allied | Air Link vs. Honda Atlas Cars |
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.
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