Correlation Between Sobr Safe and Ituran Location

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

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

Diversification Opportunities for Sobr Safe and Ituran Location

-0.71

Correlation Coefficient

Sobr Safe  Ituran Location

Pay attention - limited upside

The 3 months correlation between Sobr and Ituran is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sobr Safe and Ituran Location and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ituran Location and Sobr Safe 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 Sobr Safe are associated (or correlated) with Ituran Location. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ituran Location has no effect on the direction of Sobr Safe i.e., Sobr Safe and Ituran Location go up and down completely randomly.

Pair Corralation between Sobr Safe and Ituran Location

Given the investment horizon of 90 days Sobr Safe is expected to under-perform the Ituran Location. In addition to that, Sobr Safe is 7.55 times more volatile than Ituran Location and. It trades about -0.04 of its total potential returns per unit of risk. Ituran Location and is currently generating about 0.07 per unit of volatility. If you would invest  2,060  in Ituran Location and on October 23, 2024 and sell it today you would earn a total of  1,249  from holding Ituran Location and or generate 60.63% return on investment over 90 days.

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

Sobr Safe  vs.  Ituran Location and

Sobr Safe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sobr Safe has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's fundamental drivers remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Ituran Location

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ituran Location and are ranked lower than 17 (%) 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.

Pair Trading with Sobr Safe and Ituran Location

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

The idea behind Sobr Safe and Ituran Location and 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.