Correlation Between Iteris and DZS

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

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

Diversification Opportunities for Iteris and DZS

-0.77

Correlation Coefficient

Iteris  DZS

Pay attention - limited upside

The 3 months correlation between Iteris and DZS is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Iteris Inc and DZS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DZS Inc and Iteris 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 Iteris Inc are associated (or correlated) with DZS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DZS Inc has no effect on the direction of Iteris i.e., Iteris and DZS go up and down completely randomly.

Pair Corralation between Iteris and DZS

If you would invest  715.00  in Iteris Inc on September 21, 2024 and sell it today you would earn a total of  25,934  from holding Iteris Inc or generate 3627.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.86%
Values	Daily Returns

Iteris Inc  vs.  DZS Inc

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.

DZS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DZS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, DZS is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Iteris and DZS

The main advantage of trading using opposite Iteris and DZS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iteris position performs unexpectedly, DZS 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 DZS will offset losses from the drop in DZS's long position.

The idea behind Iteris Inc and DZS 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.