Correlation Between Wallbox NV and Interlink Electronics

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

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

Diversification Opportunities for Wallbox NV and Interlink Electronics

0.29

Correlation Coefficient

Wallbox NV  Interlink Electronics

Modest diversification

The 3 months correlation between Wallbox and Interlink is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wallbox NV and Interlink Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Electronics and Wallbox NV 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 Wallbox NV are associated (or correlated) with Interlink Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlink Electronics has no effect on the direction of Wallbox NV i.e., Wallbox NV and Interlink Electronics go up and down completely randomly.

Pair Corralation between Wallbox NV and Interlink Electronics

Considering the 90-day investment horizon Wallbox NV is expected to under-perform the Interlink Electronics. In addition to that, Wallbox NV is 1.07 times more volatile than Interlink Electronics. It trades about -0.03 of its total potential returns per unit of risk. Interlink Electronics is currently generating about 0.04 per unit of volatility. If you would invest  654.00  in Interlink Electronics on December 29, 2024 and sell it today you would earn a total of  10.00  from holding Interlink Electronics or generate 1.53% return on investment over 90 days.

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

Wallbox NV  vs.  Interlink Electronics

Wallbox NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wallbox NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Interlink Electronics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Interlink Electronics are ranked lower than 2 (%) 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.

Pair Trading with Wallbox NV and Interlink Electronics

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

The idea behind Wallbox NV and Interlink Electronics 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.