Correlation Between Amplitech and Iteris

Can any of the company-specific risk be diversified away by investing in both Amplitech 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 Amplitech and Iteris into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amplitech Group and Iteris Inc, you can compare the effects of market volatilities on Amplitech 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 Amplitech with a short position of Iteris. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amplitech and Iteris.

Diversification Opportunities for Amplitech and Iteris

0.08

Correlation Coefficient

Amplitech  Iteris

Significant diversification

The 3 months correlation between Amplitech and Iteris is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Amplitech Group and Iteris Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteris Inc and Amplitech 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 Amplitech Group 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 Amplitech i.e., Amplitech and Iteris go up and down completely randomly.

Pair Corralation between Amplitech and Iteris

Given the investment horizon of 90 days Amplitech is expected to generate 44.59 times less return on investment than Iteris. But when comparing it to its historical volatility, Amplitech Group is 17.74 times less risky than Iteris. It trades about 0.06 of its potential returns per unit of risk. Iteris Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  710.00  in Iteris Inc on September 12, 2024 and sell it today you would earn a total of  25,939  from holding Iteris Inc or generate 3653.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	66.67%
Values	Daily Returns

Amplitech Group  vs.  Iteris Inc

Amplitech Group

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amplitech Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Amplitech reported solid returns over the last few months and may actually be approaching a breakup point.

Iteris Inc

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Iteris Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unsteady basic indicators, Iteris demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amplitech and Iteris

The main advantage of trading using opposite Amplitech and Iteris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amplitech 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.

The idea behind Amplitech Group and Iteris 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.