Correlation Between Electronic Systems and Ituran Location
Can any of the company-specific risk be diversified away by investing in both Electronic Systems 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 Electronic Systems and Ituran Location into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronic Systems Technology and Ituran Location and, you can compare the effects of market volatilities on Electronic Systems 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 Electronic Systems with a short position of Ituran Location. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronic Systems and Ituran Location.
Diversification Opportunities for Electronic Systems and Ituran Location
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electronic and Ituran is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Electronic Systems Technology and Ituran Location and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ituran Location and Electronic Systems 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 Electronic Systems Technology 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 Electronic Systems i.e., Electronic Systems and Ituran Location go up and down completely randomly.
Pair Corralation between Electronic Systems and Ituran Location
Given the investment horizon of 90 days Electronic Systems Technology is expected to under-perform the Ituran Location. In addition to that, Electronic Systems is 3.56 times more volatile than Ituran Location and. It trades about -0.28 of its total potential returns per unit of risk. Ituran Location and is currently generating about 0.36 per unit of volatility. If you would invest 2,962 in Ituran Location and on October 24, 2024 and sell it today you would earn a total of 376.00 from holding Ituran Location and or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Electronic Systems Technology vs. Ituran Location and
Performance |
| Timeline |
| Electronic Systems |
| Ituran Location |
Electronic Systems and Ituran Location Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronic Systems and Ituran Location
The main advantage of trading using opposite Electronic Systems and Ituran Location positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronic Systems 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.| Electronic Systems vs. BeWhere Holdings | Electronic Systems vs. Frequency Electronics | Electronic Systems vs. Wialan Technologies | Electronic Systems vs. TPT Global Tech |
| Ituran Location vs. Silicom | Ituran Location vs. Allot Communications | Ituran Location vs. Sapiens International | Ituran Location vs. Formula Systems 1985 |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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