Correlation Between Itron and Spectris Plc
Can any of the company-specific risk be diversified away by investing in both Itron and Spectris Plc 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 Itron and Spectris Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Itron Inc and Spectris plc, you can compare the effects of market volatilities on Itron and Spectris Plc 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 Itron with a short position of Spectris Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Itron and Spectris Plc.
Diversification Opportunities for Itron and Spectris Plc
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Itron and Spectris is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Itron Inc and Spectris plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectris plc and Itron 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 Itron Inc are associated (or correlated) with Spectris Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectris plc has no effect on the direction of Itron i.e., Itron and Spectris Plc go up and down completely randomly.
Pair Corralation between Itron and Spectris Plc
Given the investment horizon of 90 days Itron Inc is expected to generate 0.75 times more return on investment than Spectris Plc. However, Itron Inc is 1.34 times less risky than Spectris Plc. It trades about 0.08 of its potential returns per unit of risk. Spectris plc is currently generating about 0.0 per unit of risk. If you would invest 5,235 in Itron Inc on August 27, 2024 and sell it today you would earn a total of 6,658 from holding Itron Inc or generate 127.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.15% |
| Values | Daily Returns |
Itron Inc vs. Spectris plc
Performance |
| Timeline |
| Itron Inc |
| Spectris plc |
Itron and Spectris Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Itron and Spectris Plc
The main advantage of trading using opposite Itron and Spectris Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Itron position performs unexpectedly, Spectris Plc 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 Spectris Plc will offset losses from the drop in Spectris Plc's long position.The idea behind Itron Inc and Spectris 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.| Spectris Plc vs. Garmin | Spectris Plc vs. Keysight Technologies | Spectris Plc vs. Fortive Corp | Spectris Plc vs. Teledyne Technologies Incorporated |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |