Correlation Between Optical Cable and Iteris

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

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

Diversification Opportunities for Optical Cable and Iteris

0.0

Correlation Coefficient

Optical Cable  Iteris

Pay attention - limited upside

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

Pair Corralation between Optical Cable and Iteris

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

Optical Cable  vs.  Iteris Inc

Optical Cable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Optical Cable has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with Optical Cable and Iteris

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

The idea behind Optical Cable and Iteris 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.