Correlation Between ITT and CIRCOR International
Can any of the company-specific risk be diversified away by investing in both ITT and CIRCOR International 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 CIRCOR International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITT Inc and CIRCOR International, you can compare the effects of market volatilities on ITT and CIRCOR International 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 CIRCOR International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITT and CIRCOR International.
Diversification Opportunities for ITT and CIRCOR International
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ITT and CIRCOR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ITT Inc and CIRCOR International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIRCOR International 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 CIRCOR International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIRCOR International has no effect on the direction of ITT i.e., ITT and CIRCOR International go up and down completely randomly.
Pair Corralation between ITT and CIRCOR International
If you would invest 14,424 in ITT Inc on October 26, 2024 and sell it today you would earn a total of 896.00 from holding ITT Inc or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.69% |
| Values | Daily Returns |
ITT Inc vs. CIRCOR International
Performance |
| Timeline |
| ITT Inc |
| CIRCOR International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ITT and CIRCOR International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITT and CIRCOR International
The main advantage of trading using opposite ITT and CIRCOR International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITT position performs unexpectedly, CIRCOR International 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 CIRCOR International will offset losses from the drop in CIRCOR International's long position.The idea behind ITT Inc and CIRCOR International 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.| CIRCOR International vs. Helios Technologies | CIRCOR International vs. Enpro Industries | CIRCOR International vs. Omega Flex | CIRCOR International vs. Luxfer Holdings PLC |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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