Correlation Between Ituran Location and Iteris

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

By analyzing existing cross correlation between Ituran Location and and Iteris Inc, you can compare the effects of market volatilities on Ituran Location and Iteris 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 Ituran Location with a short position of Iteris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ituran Location and Iteris.

Diversification Opportunities for Ituran Location and Iteris

0.16

Correlation Coefficient

Ituran Location  Iteris

Average diversification

The 3 months correlation between Ituran and Iteris is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ituran Location and and Iteris Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteris Inc and Ituran Location 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 Ituran Location and are associated (or correlated) with Iteris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iteris Inc has no effect on the direction of Ituran Location i.e., Ituran Location and Iteris go up and down completely randomly.

Pair Corralation between Ituran Location and Iteris

Given the investment horizon of 90 days Ituran Location and is expected to generate 0.97 times more return on investment than Iteris. However, Ituran Location and is 1.03 times less risky than Iteris. It trades about 0.07 of its potential returns per unit of risk. Iteris Inc is currently generating about -0.1 per unit of risk. If you would invest  2,602  in Ituran Location and on March 4, 2024 and sell it today you would earn a total of  167.00  from holding Ituran Location and or generate 6.42% return on investment over 90 days.

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

Ituran Location and  vs.  Iteris Inc

Ituran Location

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ituran Location and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Ituran Location may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Iteris Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iteris Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Ituran Location and Iteris

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

The idea behind Ituran Location and and Iteris Inc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.