Correlation Between Interlink Telecom and Hana Microelectronics

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

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

Diversification Opportunities for Interlink Telecom and Hana Microelectronics

0.1

Correlation Coefficient

Interlink Telecom  Hana Microelectronics

Average diversification

The 3 months correlation between Interlink and Hana is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Interlink Telecom Public and Hana Microelectronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Microelectronics and Interlink Telecom 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 Telecom Public are associated (or correlated) with Hana Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Microelectronics has no effect on the direction of Interlink Telecom i.e., Interlink Telecom and Hana Microelectronics go up and down completely randomly.

Pair Corralation between Interlink Telecom and Hana Microelectronics

Assuming the 90 days trading horizon Interlink Telecom Public is expected to under-perform the Hana Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Interlink Telecom Public is 1.39 times less risky than Hana Microelectronics. The stock trades about -0.06 of its potential returns per unit of risk. The Hana Microelectronics Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,890  in Hana Microelectronics Public on April 24, 2025 and sell it today you would earn a total of  240.00  from holding Hana Microelectronics Public or generate 12.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Interlink Telecom Public  vs.  Hana Microelectronics Public

Interlink Telecom Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Interlink Telecom Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Hana Microelectronics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hana Microelectronics Public are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Hana Microelectronics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Interlink Telecom and Hana Microelectronics

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

The idea behind Interlink Telecom Public and Hana Microelectronics Public 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.