Correlation Between Baylin Technologies and Iteris

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

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

Diversification Opportunities for Baylin Technologies and Iteris

0.32

Correlation Coefficient

Baylin Technologies  Iteris

Weak diversification

The 3 months correlation between Baylin and Iteris is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Baylin Technologies and Iteris Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteris Inc and Baylin Technologies 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 Baylin Technologies 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 Baylin Technologies i.e., Baylin Technologies and Iteris go up and down completely randomly.

Pair Corralation between Baylin Technologies and Iteris

If you would invest  26,649  in Iteris Inc on September 21, 2024 and sell it today you would earn a total of  0.00  from holding Iteris Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.35%
Values	Daily Returns

Baylin Technologies  vs.  Iteris Inc

Baylin Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baylin Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Baylin Technologies 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 Baylin Technologies and Iteris

The main advantage of trading using opposite Baylin Technologies and Iteris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baylin Technologies 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 Baylin Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.