Correlation Between Iteris and Frequency Electronics

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

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

Diversification Opportunities for Iteris and Frequency Electronics

0.0

Correlation Coefficient

Iteris  Frequency Electronics

Pay attention - limited upside

The 3 months correlation between Iteris and Frequency is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Iteris Inc and Frequency Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Electronics 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 Frequency Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Electronics has no effect on the direction of Iteris i.e., Iteris and Frequency Electronics go up and down completely randomly.

Pair Corralation between Iteris and Frequency Electronics

If you would invest (100.00) in Iteris Inc on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Iteris Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Iteris Inc  vs.  Frequency Electronics

Iteris Inc

Risk-Adjusted Performance

Very Weak

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

Frequency Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Frequency Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Iteris and Frequency Electronics

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

The idea behind Iteris Inc and Frequency Electronics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.