Correlation Between Iteris and Telesat Corp

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

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

Diversification Opportunities for Iteris and Telesat Corp

-0.69

Correlation Coefficient

Iteris  Telesat Corp

Excellent diversification

The 3 months correlation between Iteris and Telesat is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Iteris Inc and Telesat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telesat Corp 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 Telesat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telesat Corp has no effect on the direction of Iteris i.e., Iteris and Telesat Corp go up and down completely randomly.

Pair Corralation between Iteris and Telesat Corp

Considering the 90-day investment horizon Iteris Inc is expected to generate 29.15 times more return on investment than Telesat Corp. However, Iteris is 29.15 times more volatile than Telesat Corp. It trades about 0.15 of its potential returns per unit of risk. Telesat Corp is currently generating about 0.1 per unit of risk. If you would invest  705.00  in Iteris Inc on August 31, 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 Against
Strength	Weak
Accuracy	77.78%
Values	Daily Returns

Iteris Inc  vs.  Telesat Corp

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.

Telesat Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Telesat Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Telesat Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iteris and Telesat Corp

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

The idea behind Iteris Inc and Telesat Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.