Correlation Between Celestica and Interlink Electronics
Can any of the company-specific risk be diversified away by investing in both Celestica 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 Celestica and Interlink Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and Interlink Electronics, you can compare the effects of market volatilities on Celestica 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 Celestica with a short position of Interlink Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Interlink Electronics.
Diversification Opportunities for Celestica and Interlink Electronics
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Celestica and Interlink is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Interlink Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Electronics and Celestica 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 Celestica 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 Celestica i.e., Celestica and Interlink Electronics go up and down completely randomly.
Pair Corralation between Celestica and Interlink Electronics
Assuming the 90 days trading horizon Celestica is expected to generate 0.53 times more return on investment than Interlink Electronics. However, Celestica is 1.87 times less risky than Interlink Electronics. It trades about 0.25 of its potential returns per unit of risk. Interlink Electronics is currently generating about 0.08 per unit of risk. If you would invest 21,979 in Celestica on July 18, 2025 and sell it today you would earn a total of 17,370 from holding Celestica or generate 79.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.88% |
| Values | Daily Returns |
Celestica vs. Interlink Electronics
Performance |
| Timeline |
| Celestica |
| Interlink Electronics |
Celestica and Interlink Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celestica and Interlink Electronics
The main advantage of trading using opposite Celestica and Interlink Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica 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.| Celestica vs. Descartes Systems Group | Celestica vs. CAE Inc | Celestica vs. CGI Inc | Celestica vs. Cogeco Communications |
| Interlink Electronics vs. Allient | Interlink Electronics vs. Data IO | Interlink Electronics vs. Electro Sensors | Interlink Electronics vs. Key Tronic |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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