Correlation Between ITT and Altra Industrial
Can any of the company-specific risk be diversified away by investing in both ITT and Altra Industrial 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 ITT and Altra Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITT Inc and Altra Industrial Motion, you can compare the effects of market volatilities on ITT and Altra Industrial 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 ITT with a short position of Altra Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITT and Altra Industrial.
Diversification Opportunities for ITT and Altra Industrial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ITT and Altra is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ITT Inc and Altra Industrial Motion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altra Industrial Motion and ITT 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 ITT Inc are associated (or correlated) with Altra Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altra Industrial Motion has no effect on the direction of ITT i.e., ITT and Altra Industrial go up and down completely randomly.
Pair Corralation between ITT and Altra Industrial
If you would invest 13,224 in ITT Inc on August 29, 2024 and sell it today you would earn a total of 2,647 from holding ITT Inc or generate 20.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.8% |
| Values | Daily Returns |
ITT Inc vs. Altra Industrial Motion
Performance |
| Timeline |
| ITT Inc |
| Altra Industrial Motion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ITT and Altra Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITT and Altra Industrial
The main advantage of trading using opposite ITT and Altra Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITT position performs unexpectedly, Altra Industrial 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 Altra Industrial will offset losses from the drop in Altra Industrial's long position.| ITT vs. Aquagold International | ITT vs. Morningstar Unconstrained Allocation | ITT vs. High Yield Municipal Fund | ITT vs. Thrivent High Yield |
| Altra Industrial vs. Franklin Electric Co | Altra Industrial vs. Donaldson | Altra Industrial vs. John Bean Technologies | Altra Industrial vs. ITT Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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