Correlation Between Hurco Companies and ITM Power

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Hurco Companies and ITM Power 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 Hurco Companies and ITM Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and ITM Power Plc, you can compare the effects of market volatilities on Hurco Companies and ITM Power 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 Hurco Companies with a short position of ITM Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and ITM Power.

Diversification Opportunities for Hurco Companies and ITM Power

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Hurco and ITM is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and ITM Power Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Power Plc and Hurco Companies 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 Hurco Companies are associated (or correlated) with ITM Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Power Plc has no effect on the direction of Hurco Companies i.e., Hurco Companies and ITM Power go up and down completely randomly.

Pair Corralation between Hurco Companies and ITM Power

Given the investment horizon of 90 days Hurco Companies is expected to generate 0.56 times more return on investment than ITM Power. However, Hurco Companies is 1.78 times less risky than ITM Power. It trades about 0.24 of its potential returns per unit of risk. ITM Power Plc is currently generating about -0.24 per unit of risk. If you would invest  2,082  in Hurco Companies on September 2, 2024 and sell it today you would earn a total of  250.00  from holding Hurco Companies or generate 12.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hurco Companies  vs.  ITM Power Plc

 Performance 
       Timeline  
Hurco Companies 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Hurco Companies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Hurco Companies exhibited solid returns over the last few months and may actually be approaching a breakup point.
ITM Power Plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ITM Power Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hurco Companies and ITM Power Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hurco Companies and ITM Power

The main advantage of trading using opposite Hurco Companies and ITM Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies position performs unexpectedly, ITM Power 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 ITM Power will offset losses from the drop in ITM Power's long position.
The idea behind Hurco Companies and ITM Power 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

Other Complementary Tools

Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins