Correlation Between Consumer Automotive and Itronics

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

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

Diversification Opportunities for Consumer Automotive and Itronics

1.0

Correlation Coefficient

Consumer Automotive  Itronics

No risk reduction

The 3 months correlation between Consumer and Itronics is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Automotive Finance and Itronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itronics and Consumer Automotive 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 Consumer Automotive Finance are associated (or correlated) with Itronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itronics has no effect on the direction of Consumer Automotive i.e., Consumer Automotive and Itronics go up and down completely randomly.

Pair Corralation between Consumer Automotive and Itronics

If you would invest  0.01  in Itronics on May 18, 2025 and sell it today you would earn a total of  0.00  from holding Itronics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.88%
Values	Daily Returns

Consumer Automotive Finance  vs.  Itronics

Consumer Automotive

Risk-Adjusted Performance

Weakest

Over the last 90 days Consumer Automotive Finance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Consumer Automotive is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Itronics

Risk-Adjusted Performance

Weakest

Over the last 90 days Itronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Itronics is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Consumer Automotive and Itronics

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

The idea behind Consumer Automotive Finance and Itronics 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.