Correlation Between Ituran Location and Inseego Corp

Can any of the company-specific risk be diversified away by investing in both Ituran Location and Inseego 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 Ituran Location and Inseego Corp 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 Inseego Corp, you can compare the effects of market volatilities on Ituran Location and Inseego 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 Ituran Location with a short position of Inseego Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ituran Location and Inseego Corp.

Diversification Opportunities for Ituran Location and Inseego Corp

-0.21

Correlation Coefficient

Ituran Location  Inseego Corp

Very good diversification

The 3 months correlation between Ituran and Inseego is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ituran Location and and Inseego Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inseego Corp 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 Inseego Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inseego Corp has no effect on the direction of Ituran Location i.e., Ituran Location and Inseego Corp go up and down completely randomly.

Pair Corralation between Ituran Location and Inseego Corp

Given the investment horizon of 90 days Ituran Location and is expected to generate 0.76 times more return on investment than Inseego Corp. However, Ituran Location and is 1.32 times less risky than Inseego Corp. It trades about 0.13 of its potential returns per unit of risk. Inseego Corp is currently generating about -0.05 per unit of risk. If you would invest  2,946  in Ituran Location and on December 30, 2024 and sell it today you would earn a total of  712.00  from holding Ituran Location and or generate 24.17% return on investment over 90 days.

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

Ituran Location and  vs.  Inseego Corp

Ituran Location

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ituran Location and are ranked lower than 10 (%) 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.

Inseego Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inseego Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ituran Location and Inseego Corp

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

The idea behind Ituran Location and and Inseego 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.

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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.