Correlation Between ITT and Nuburu
Can any of the company-specific risk be diversified away by investing in both ITT and Nuburu 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 Nuburu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITT Inc and Nuburu Inc, you can compare the effects of market volatilities on ITT and Nuburu 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 Nuburu. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITT and Nuburu.
Diversification Opportunities for ITT and Nuburu
Very good diversification
The 3 months correlation between ITT and Nuburu is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ITT Inc and Nuburu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuburu Inc 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 Nuburu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuburu Inc has no effect on the direction of ITT i.e., ITT and Nuburu go up and down completely randomly.
Pair Corralation between ITT and Nuburu
Considering the 90-day investment horizon ITT Inc is expected to generate 0.11 times more return on investment than Nuburu. However, ITT Inc is 8.75 times less risky than Nuburu. It trades about 0.07 of its potential returns per unit of risk. Nuburu Inc is currently generating about -0.03 per unit of risk. If you would invest 8,687 in ITT Inc on October 12, 2024 and sell it today you would earn a total of 5,220 from holding ITT Inc or generate 60.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITT Inc vs. Nuburu Inc
Performance |
| Timeline |
| ITT Inc |
| Nuburu Inc |
ITT and Nuburu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITT and Nuburu
The main advantage of trading using opposite ITT and Nuburu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITT position performs unexpectedly, Nuburu 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 Nuburu will offset losses from the drop in Nuburu's long position.The idea behind ITT Inc and Nuburu Inc 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.| Nuburu vs. Laser Photonics | Nuburu vs. JE Cleantech Holdings | Nuburu vs. Reelcause | Nuburu vs. Shapeways Holdings, Common |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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