Correlation Between Silicom and Iteris
Can any of the company-specific risk be diversified away by investing in both Silicom and Iteris 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 Silicom and Iteris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicom and Iteris Inc, you can compare the effects of market volatilities on Silicom and Iteris 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 Silicom with a short position of Iteris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicom and Iteris.
Diversification Opportunities for Silicom and Iteris
Weak diversification
The 3 months correlation between Silicom and Iteris is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Silicom and Iteris Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteris Inc and Silicom 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 Silicom are associated (or correlated) with Iteris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iteris Inc has no effect on the direction of Silicom i.e., Silicom and Iteris go up and down completely randomly.
Pair Corralation between Silicom and Iteris
Given the investment horizon of 90 days Silicom is expected to under-perform the Iteris. But the stock apears to be less risky and, when comparing its historical volatility, Silicom is 36.01 times less risky than Iteris. The stock trades about -0.05 of its potential returns per unit of risk. The Iteris Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 443.00 in Iteris Inc on September 2, 2024 and sell it today you would earn a total of 26,206 from holding Iteris Inc or generate 5915.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.1% |
| Values | Daily Returns |
Silicom vs. Iteris Inc
Performance |
| Timeline |
| Silicom |
| Iteris Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Silicom and Iteris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicom and Iteris
The main advantage of trading using opposite Silicom and Iteris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicom position performs unexpectedly, Iteris 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 Iteris will offset losses from the drop in Iteris' long position.| Silicom vs. Ituran Location and | Silicom vs. Sapiens International | Silicom vs. Allot Communications | Silicom vs. Radcom |
| Iteris vs. Optical Cable | Iteris vs. KVH Industries | Iteris vs. Knowles Cor | Iteris vs. Comtech Telecommunications Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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