Correlation Between Ituran Location and Knowles Cor
Can any of the company-specific risk be diversified away by investing in both Ituran Location and Knowles Cor 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 Ituran Location and Knowles Cor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ituran Location and and Knowles Cor, you can compare the effects of market volatilities on Ituran Location and Knowles Cor 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 Ituran Location with a short position of Knowles Cor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ituran Location and Knowles Cor.
Diversification Opportunities for Ituran Location and Knowles Cor
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ituran and Knowles is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Ituran Location and and Knowles Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles Cor and Ituran Location 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 Ituran Location and are associated (or correlated) with Knowles Cor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles Cor has no effect on the direction of Ituran Location i.e., Ituran Location and Knowles Cor go up and down completely randomly.
Pair Corralation between Ituran Location and Knowles Cor
Given the investment horizon of 90 days Ituran Location and is expected to generate 0.76 times more return on investment than Knowles Cor. However, Ituran Location and is 1.32 times less risky than Knowles Cor. It trades about 0.04 of its potential returns per unit of risk. Knowles Cor is currently generating about 0.02 per unit of risk. If you would invest 2,151 in Ituran Location and on August 24, 2024 and sell it today you would earn a total of 699.00 from holding Ituran Location and or generate 32.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ituran Location and vs. Knowles Cor
Performance |
| Timeline |
| Ituran Location |
| Knowles Cor |
Ituran Location and Knowles Cor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ituran Location and Knowles Cor
The main advantage of trading using opposite Ituran Location and Knowles Cor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ituran Location position performs unexpectedly, Knowles Cor 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 Knowles Cor will offset losses from the drop in Knowles Cor's long position.| Ituran Location vs. Silicom | Ituran Location vs. Allot Communications | Ituran Location vs. Sapiens International | Ituran Location vs. Formula Systems 1985 |
| Knowles Cor vs. Impinj Inc | Knowles Cor vs. Ubiquiti Networks | Knowles Cor vs. AmpliTech Group | Knowles Cor vs. Viavi Solutions |
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.
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