Correlation Between Vislink Technologies and Ituran Location

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

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

Diversification Opportunities for Vislink Technologies and Ituran Location

-0.17

Correlation Coefficient

Vislink Technologies  Ituran Location

Good diversification

The 3 months correlation between Vislink and Ituran is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vislink Technologies and Ituran Location and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ituran Location and Vislink Technologies 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 Vislink Technologies are associated (or correlated) with Ituran Location. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ituran Location has no effect on the direction of Vislink Technologies i.e., Vislink Technologies and Ituran Location go up and down completely randomly.

Pair Corralation between Vislink Technologies and Ituran Location

Given the investment horizon of 90 days Vislink Technologies is expected to generate 2.56 times more return on investment than Ituran Location. However, Vislink Technologies is 2.56 times more volatile than Ituran Location and. It trades about 0.01 of its potential returns per unit of risk. Ituran Location and is currently generating about -0.06 per unit of risk. If you would invest  454.00  in Vislink Technologies on March 15, 2024 and sell it today you would lose (4.00) from holding Vislink Technologies or give up 0.88% of portfolio value over 90 days.

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

Vislink Technologies  vs.  Ituran Location and

Vislink Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vislink Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Vislink Technologies disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ituran Location

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ituran Location and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Ituran Location is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Vislink Technologies and Ituran Location

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

The idea behind Vislink Technologies and Ituran Location and 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.