Correlation Between Automatic Bank and Ilex Medical

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

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

Diversification Opportunities for Automatic Bank and Ilex Medical

0.23

Correlation Coefficient

Automatic Bank  Ilex Medical

Modest diversification

The 3 months correlation between Automatic and Ilex is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Bank Services and Ilex Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilex Medical and Automatic Bank 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 Automatic Bank Services are associated (or correlated) with Ilex Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilex Medical has no effect on the direction of Automatic Bank i.e., Automatic Bank and Ilex Medical go up and down completely randomly.

Pair Corralation between Automatic Bank and Ilex Medical

Assuming the 90 days trading horizon Automatic Bank Services is expected to generate 1.23 times more return on investment than Ilex Medical. However, Automatic Bank is 1.23 times more volatile than Ilex Medical. It trades about 0.03 of its potential returns per unit of risk. Ilex Medical is currently generating about -0.01 per unit of risk. If you would invest  221,000  in Automatic Bank Services on April 24, 2025 and sell it today you would earn a total of  6,000  from holding Automatic Bank Services or generate 2.71% return on investment over 90 days.

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

Automatic Bank Services  vs.  Ilex Medical

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.

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.

Pair Trading with Automatic Bank and Ilex Medical

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

The idea behind Automatic Bank Services and Ilex Medical 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.