Correlation Between Luna Innovations and Interlink Electronics
Can any of the company-specific risk be diversified away by investing in both Luna Innovations 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 Luna Innovations and Interlink Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Luna Innovations Incorporated and Interlink Electronics, you can compare the effects of market volatilities on Luna Innovations 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 Luna Innovations with a short position of Interlink Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Luna Innovations and Interlink Electronics.
Diversification Opportunities for Luna Innovations and Interlink Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Luna and Interlink is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Luna Innovations Incorporated and Interlink Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlink Electronics and Luna Innovations 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 Luna Innovations Incorporated 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 Luna Innovations i.e., Luna Innovations and Interlink Electronics go up and down completely randomly.
Pair Corralation between Luna Innovations and Interlink Electronics
If you would invest 619.00 in Interlink Electronics on May 28, 2025 and sell it today you would earn a total of 274.00 from holding Interlink Electronics or generate 44.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Luna Innovations Incorporated vs. Interlink Electronics
Performance |
| Timeline |
| Luna Innovations |
Risk-Adjusted Performance
Weakest
Weak | Strong |
| Interlink Electronics |
Luna Innovations and Interlink Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Luna Innovations and Interlink Electronics
The main advantage of trading using opposite Luna Innovations and Interlink Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Luna Innovations 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.| Luna Innovations vs. Genasys | Luna Innovations vs. Sensata Technologies Holding | Luna Innovations vs. Focus Universal | Luna Innovations vs. Mesa Laboratories |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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