Correlation Between Ilex Medical and Automatic Bank

Can any of the company-specific risk be diversified away by investing in both Ilex Medical and Automatic Bank 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 Ilex Medical and Automatic Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ilex Medical and Automatic Bank Services, you can compare the effects of market volatilities on Ilex Medical and Automatic Bank 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 Ilex Medical with a short position of Automatic Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilex Medical and Automatic Bank.

Diversification Opportunities for Ilex Medical and Automatic Bank

-0.06

Correlation Coefficient

Ilex Medical  Automatic Bank

Good diversification

The 3 months correlation between Ilex and Automatic is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ilex Medical and Automatic Bank Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Bank Services and Ilex Medical 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 Ilex Medical are associated (or correlated) with Automatic Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Bank Services has no effect on the direction of Ilex Medical i.e., Ilex Medical and Automatic Bank go up and down completely randomly.

Pair Corralation between Ilex Medical and Automatic Bank

Assuming the 90 days trading horizon Ilex Medical is expected to under-perform the Automatic Bank. But the stock apears to be less risky and, when comparing its historical volatility, Ilex Medical is 1.26 times less risky than Automatic Bank. The stock trades about -0.03 of its potential returns per unit of risk. The Automatic Bank Services is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  212,000  in Automatic Bank Services on April 22, 2025 and sell it today you would earn a total of  3,400  from holding Automatic Bank Services or generate 1.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.0%
Values	Daily Returns

Ilex Medical  vs.  Automatic Bank Services

Ilex Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ilex Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ilex Medical is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Automatic Bank Services

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Bank Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Automatic Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ilex Medical and Automatic Bank

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

The idea behind Ilex Medical and Automatic Bank Services 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..