Correlation Between Interlink Electronics and Curtis Mathes

Can any of the company-specific risk be diversified away by investing in both Interlink Electronics and Curtis Mathes 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 Curtis Mathes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Interlink Electronics and Curtis Mathes Corp, you can compare the effects of market volatilities on Interlink Electronics and Curtis Mathes 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 Curtis Mathes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interlink Electronics and Curtis Mathes.

Diversification Opportunities for Interlink Electronics and Curtis Mathes

-0.64

Correlation Coefficient

Interlink Electronics  Curtis Mathes

Excellent diversification

The 3 months correlation between Interlink and Curtis is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Interlink Electronics and Curtis Mathes Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Curtis Mathes Corp 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 Curtis Mathes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Curtis Mathes Corp has no effect on the direction of Interlink Electronics i.e., Interlink Electronics and Curtis Mathes go up and down completely randomly.

Pair Corralation between Interlink Electronics and Curtis Mathes

Given the investment horizon of 90 days Interlink Electronics is expected to generate 0.67 times more return on investment than Curtis Mathes. However, Interlink Electronics is 1.49 times less risky than Curtis Mathes. It trades about 0.14 of its potential returns per unit of risk. Curtis Mathes Corp is currently generating about -0.17 per unit of risk. If you would invest  364.00  in Interlink Electronics on September 14, 2024 and sell it today you would earn a total of  229.00  from holding Interlink Electronics or generate 62.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Interlink Electronics  vs.  Curtis Mathes Corp

Interlink Electronics

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interlink Electronics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Interlink Electronics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Curtis Mathes Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Curtis Mathes Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Interlink Electronics and Curtis Mathes

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

The idea behind Interlink Electronics and Curtis Mathes Corp 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.