Correlation Between BizLink Holding and Flexium Interconnect

Can any of the company-specific risk be diversified away by investing in both BizLink Holding and Flexium Interconnect 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 BizLink Holding and Flexium Interconnect into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BizLink Holding and Flexium Interconnect, you can compare the effects of market volatilities on BizLink Holding and Flexium Interconnect 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 BizLink Holding with a short position of Flexium Interconnect. Check out your portfolio center. Please also check ongoing floating volatility patterns of BizLink Holding and Flexium Interconnect.

Diversification Opportunities for BizLink Holding and Flexium Interconnect

0.39

Correlation Coefficient

BizLink Holding  Flexium Interconnect

Weak diversification

The 3 months correlation between BizLink and Flexium is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding BizLink Holding and Flexium Interconnect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexium Interconnect and BizLink 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 BizLink Holding are associated (or correlated) with Flexium Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexium Interconnect has no effect on the direction of BizLink Holding i.e., BizLink Holding and Flexium Interconnect go up and down completely randomly.

Pair Corralation between BizLink Holding and Flexium Interconnect

Assuming the 90 days trading horizon BizLink Holding is expected to under-perform the Flexium Interconnect. In addition to that, BizLink Holding is 1.89 times more volatile than Flexium Interconnect. It trades about -0.09 of its total potential returns per unit of risk. Flexium Interconnect is currently generating about 0.04 per unit of volatility. If you would invest  6,630  in Flexium Interconnect on December 4, 2024 and sell it today you would earn a total of  250.00  from holding Flexium Interconnect or generate 3.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BizLink Holding  vs.  Flexium Interconnect

BizLink Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days BizLink Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Flexium Interconnect

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Flexium Interconnect are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Flexium Interconnect is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BizLink Holding and Flexium Interconnect

The main advantage of trading using opposite BizLink Holding and Flexium Interconnect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BizLink Holding position performs unexpectedly, Flexium Interconnect 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 Flexium Interconnect will offset losses from the drop in Flexium Interconnect's long position.

The idea behind BizLink Holding and Flexium Interconnect pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.