Correlation Between Hurco Companies and ITT
Can any of the company-specific risk be diversified away by investing in both Hurco Companies and ITT 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 ITT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and ITT Inc, you can compare the effects of market volatilities on Hurco Companies and ITT 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 ITT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and ITT.
Diversification Opportunities for Hurco Companies and ITT
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hurco and ITT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and ITT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITT Inc 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 ITT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITT Inc has no effect on the direction of Hurco Companies i.e., Hurco Companies and ITT go up and down completely randomly.
Pair Corralation between Hurco Companies and ITT
Given the investment horizon of 90 days Hurco Companies is expected to generate 2.28 times less return on investment than ITT. In addition to that, Hurco Companies is 1.81 times more volatile than ITT Inc. It trades about 0.02 of its total potential returns per unit of risk. ITT Inc is currently generating about 0.09 per unit of volatility. If you would invest 14,024 in ITT Inc on November 1, 2024 and sell it today you would earn a total of 1,170 from holding ITT Inc or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurco Companies vs. ITT Inc
Performance |
| Timeline |
| Hurco Companies |
| ITT Inc |
Hurco Companies and ITT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurco Companies and ITT
The main advantage of trading using opposite Hurco Companies and ITT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies position performs unexpectedly, ITT 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 ITT will offset losses from the drop in ITT's long position.| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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