Correlation Between Energous and Itron

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

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

Diversification Opportunities for Energous and Itron

-0.72

Correlation Coefficient

Energous  Itron

Pay attention - limited upside

The 3 months correlation between Energous and Itron is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Energous and Itron Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itron Inc and Energous 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 Energous are associated (or correlated) with Itron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itron Inc has no effect on the direction of Energous i.e., Energous and Itron go up and down completely randomly.

Pair Corralation between Energous and Itron

Given the investment horizon of 90 days Energous is expected to under-perform the Itron. In addition to that, Energous is 2.18 times more volatile than Itron Inc. It trades about -0.17 of its total potential returns per unit of risk. Itron Inc is currently generating about 0.17 per unit of volatility. If you would invest  9,777  in Itron Inc on September 2, 2024 and sell it today you would earn a total of  2,076  from holding Itron Inc or generate 21.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Energous  vs.  Itron Inc

Energous

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energous has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Itron Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Itron Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Itron demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Energous and Itron

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

The idea behind Energous and Itron 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.