Correlation Between Moving IMage and Iteris

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

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

Diversification Opportunities for Moving IMage and Iteris

0.47

Correlation Coefficient

Moving IMage  Iteris

Very weak diversification

The 3 months correlation between Moving and Iteris is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Moving iMage Technologies and Iteris Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteris Inc and Moving IMage 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 Moving iMage 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 Moving IMage i.e., Moving IMage and Iteris go up and down completely randomly.

Pair Corralation between Moving IMage and Iteris

Given the investment horizon of 90 days Moving IMage is expected to generate 60.06 times less return on investment than Iteris. But when comparing it to its historical volatility, Moving iMage Technologies is 36.48 times less risky than Iteris. It trades about 0.09 of its potential returns per unit of risk. Iteris Inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  705.00  in Iteris Inc on September 4, 2024 and sell it today you would earn a total of  25,944  from holding Iteris Inc or generate 3680.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	75.0%
Values	Daily Returns

Moving iMage Technologies  vs.  Iteris Inc

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.

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 Moving IMage and Iteris

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

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.