Correlation Between Trio Tech and Ilika Plc

Can any of the company-specific risk be diversified away by investing in both Trio Tech and Ilika Plc 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 Trio Tech and Ilika Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trio Tech International and Ilika plc, you can compare the effects of market volatilities on Trio Tech and Ilika Plc 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 Trio Tech with a short position of Ilika Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trio Tech and Ilika Plc.

Diversification Opportunities for Trio Tech and Ilika Plc

0.62

Correlation Coefficient

Trio Tech  Ilika Plc

Poor diversification

The 3 months correlation between Trio and Ilika is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Trio Tech International and Ilika plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilika plc and Trio Tech 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 Trio Tech International are associated (or correlated) with Ilika Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilika plc has no effect on the direction of Trio Tech i.e., Trio Tech and Ilika Plc go up and down completely randomly.

Pair Corralation between Trio Tech and Ilika Plc

Considering the 90-day investment horizon Trio Tech is expected to generate 2.24 times less return on investment than Ilika Plc. But when comparing it to its historical volatility, Trio Tech International is 1.35 times less risky than Ilika Plc. It trades about 0.05 of its potential returns per unit of risk. Ilika plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Ilika plc on May 6, 2025 and sell it today you would earn a total of  9.00  from holding Ilika plc or generate 18.0% return on investment over 90 days.

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

Trio Tech International  vs.  Ilika plc

Trio Tech International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trio Tech International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Trio Tech may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Ilika plc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ilika plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, Ilika Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trio Tech and Ilika Plc

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

The idea behind Trio Tech International and Ilika plc 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.