Correlation Between Iteris and Moving IMage

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

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

Diversification Opportunities for Iteris and Moving IMage

0.47

Correlation Coefficient

Iteris  Moving IMage

Very weak diversification

The 3 months correlation between Iteris and Moving is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Iteris Inc and Moving iMage Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moving iMage Technologies 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 Moving IMage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moving iMage Technologies has no effect on the direction of Iteris i.e., Iteris and Moving IMage go up and down completely randomly.

Pair Corralation between Iteris and Moving IMage

Considering the 90-day investment horizon Iteris Inc is expected to generate 1.99 times more return on investment than Moving IMage. However, Iteris is 1.99 times more volatile than Moving iMage Technologies. It trades about 0.63 of its potential returns per unit of risk. Moving iMage Technologies is currently generating about 0.13 per unit of risk. If you would invest  22,119  in Iteris Inc on September 4, 2024 and sell it today you would earn a total of  4,530  from holding Iteris Inc or generate 20.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	23.81%
Values	Daily Returns

Iteris Inc  vs.  Moving iMage Technologies

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.

Moving iMage Technologies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moving iMage Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Moving IMage reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iteris and Moving IMage

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

The idea behind Iteris Inc and Moving iMage Technologies 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.