Correlation Between Ituran Location and CAMP4 THERAPEUTICS

Can any of the company-specific risk be diversified away by investing in both Ituran Location and CAMP4 THERAPEUTICS 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 Ituran Location and CAMP4 THERAPEUTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ituran Location and and CAMP4 THERAPEUTICS PORATION, you can compare the effects of market volatilities on Ituran Location and CAMP4 THERAPEUTICS 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 Ituran Location with a short position of CAMP4 THERAPEUTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ituran Location and CAMP4 THERAPEUTICS.

Diversification Opportunities for Ituran Location and CAMP4 THERAPEUTICS

-0.33

Correlation Coefficient

Ituran Location  CAMP4 THERAPEUTICS

Very good diversification

The 3 months correlation between Ituran and CAMP4 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ituran Location and and CAMP4 THERAPEUTICS PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAMP4 THERAPEUTICS and Ituran Location 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 Ituran Location and are associated (or correlated) with CAMP4 THERAPEUTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAMP4 THERAPEUTICS has no effect on the direction of Ituran Location i.e., Ituran Location and CAMP4 THERAPEUTICS go up and down completely randomly.

Pair Corralation between Ituran Location and CAMP4 THERAPEUTICS

Given the investment horizon of 90 days Ituran Location is expected to generate 1.75 times less return on investment than CAMP4 THERAPEUTICS. But when comparing it to its historical volatility, Ituran Location and is 5.35 times less risky than CAMP4 THERAPEUTICS. It trades about 0.19 of its potential returns per unit of risk. CAMP4 THERAPEUTICS PORATION is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  507.00  in CAMP4 THERAPEUTICS PORATION on December 2, 2024 and sell it today you would lose (16.00) from holding CAMP4 THERAPEUTICS PORATION or give up 3.16% of portfolio value over 90 days.

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

Ituran Location and  vs.  CAMP4 THERAPEUTICS PORATION

Ituran Location

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ituran Location and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Ituran Location displayed solid returns over the last few months and may actually be approaching a breakup point.

CAMP4 THERAPEUTICS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CAMP4 THERAPEUTICS PORATION are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent primary indicators, CAMP4 THERAPEUTICS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ituran Location and CAMP4 THERAPEUTICS

The main advantage of trading using opposite Ituran Location and CAMP4 THERAPEUTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ituran Location position performs unexpectedly, CAMP4 THERAPEUTICS 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 CAMP4 THERAPEUTICS will offset losses from the drop in CAMP4 THERAPEUTICS's long position.

The idea behind Ituran Location and and CAMP4 THERAPEUTICS PORATION 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .