Correlation Between Spectris Plc and Itron

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

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

Diversification Opportunities for Spectris Plc and Itron

0.95

Correlation Coefficient

Spectris Plc  Itron

Almost no diversification

The 3 months correlation between Spectris and Itron is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Spectris plc and Itron Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itron Inc and Spectris Plc 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 Spectris plc are associated (or correlated) with Itron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itron Inc has no effect on the direction of Spectris Plc i.e., Spectris Plc and Itron go up and down completely randomly.

Pair Corralation between Spectris Plc and Itron

Assuming the 90 days horizon Spectris plc is expected to generate 6.03 times more return on investment than Itron. However, Spectris Plc is 6.03 times more volatile than Itron Inc. It trades about 0.19 of its potential returns per unit of risk. Itron Inc is currently generating about 0.28 per unit of risk. If you would invest  2,609  in Spectris plc on April 25, 2025 and sell it today you would earn a total of  2,766  from holding Spectris plc or generate 106.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Spectris plc  vs.  Itron Inc

Spectris plc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spectris plc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward-looking indicators, Spectris Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Itron Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Itron Inc are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Itron demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Spectris Plc and Itron

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

The idea behind Spectris plc and Itron 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.