Correlation Between Autocorp Holding and Interlink Telecom
Can any of the company-specific risk be diversified away by investing in both Autocorp Holding and Interlink Telecom 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 Autocorp Holding and Interlink Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autocorp Holding Public and Interlink Telecom Public, you can compare the effects of market volatilities on Autocorp Holding and Interlink Telecom 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 Autocorp Holding with a short position of Interlink Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autocorp Holding and Interlink Telecom.
Diversification Opportunities for Autocorp Holding and Interlink Telecom
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Autocorp and Interlink is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Autocorp Holding Public and Interlink Telecom Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Telecom Public and Autocorp Holding 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 Autocorp Holding Public are associated (or correlated) with Interlink Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Telecom Public has no effect on the direction of Autocorp Holding i.e., Autocorp Holding and Interlink Telecom go up and down completely randomly.
Pair Corralation between Autocorp Holding and Interlink Telecom
Assuming the 90 days trading horizon Autocorp Holding Public is expected to generate 0.53 times more return on investment than Interlink Telecom. However, Autocorp Holding Public is 1.89 times less risky than Interlink Telecom. It trades about -0.12 of its potential returns per unit of risk. Interlink Telecom Public is currently generating about -0.14 per unit of risk. If you would invest 93.00 in Autocorp Holding Public on September 25, 2024 and sell it today you would lose (3.00) from holding Autocorp Holding Public or give up 3.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Autocorp Holding Public vs. Interlink Telecom Public
Performance |
Timeline |
Autocorp Holding Public |
Interlink Telecom Public |
Autocorp Holding and Interlink Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Autocorp Holding and Interlink Telecom
The main advantage of trading using opposite Autocorp Holding and Interlink Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autocorp Holding position performs unexpectedly, Interlink Telecom 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 Telecom will offset losses from the drop in Interlink Telecom's long position.Autocorp Holding vs. Amanah Leasing Public | Autocorp Holding vs. Asia Fiber Public | Autocorp Holding vs. Ingress Industrial Public | Autocorp Holding vs. Ekarat Engineering 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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