Correlation Between Cepton and Itron
Can any of the company-specific risk be diversified away by investing in both Cepton and Itron 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 Cepton and Itron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Itron Inc, you can compare the effects of market volatilities on Cepton and Itron 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 Cepton with a short position of Itron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Itron.
Diversification Opportunities for Cepton and Itron
Very weak diversification
The 3 months correlation between Cepton and Itron is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Itron Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itron Inc and Cepton 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 Cepton Inc are associated (or correlated) with Itron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itron Inc has no effect on the direction of Cepton i.e., Cepton and Itron go up and down completely randomly.
Pair Corralation between Cepton and Itron
Assuming the 90 days horizon Cepton Inc is expected to generate 6.42 times more return on investment than Itron. However, Cepton is 6.42 times more volatile than Itron Inc. It trades about 0.08 of its potential returns per unit of risk. Itron Inc is currently generating about 0.09 per unit of risk. If you would invest 0.84 in Cepton Inc on August 25, 2024 and sell it today you would earn a total of 0.16 from holding Cepton Inc or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.96% |
| Values | Daily Returns |
Cepton Inc vs. Itron Inc
Performance |
| Timeline |
| Cepton Inc |
| Itron Inc |
Cepton and Itron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Itron
The main advantage of trading using opposite Cepton and Itron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton position performs unexpectedly, Itron 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 Itron will offset losses from the drop in Itron's long position.| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |