Correlation Between Trimble and Itron

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

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

Diversification Opportunities for Trimble and Itron

0.91

Correlation Coefficient

Trimble  Itron

Almost no diversification

The 3 months correlation between Trimble and Itron is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Trimble and Itron Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itron Inc and Trimble 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 Trimble 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 Trimble i.e., Trimble and Itron go up and down completely randomly.

Pair Corralation between Trimble and Itron

Given the investment horizon of 90 days Trimble is expected to generate 1.03 times more return on investment than Itron. However, Trimble is 1.03 times more volatile than Itron Inc. It trades about 0.42 of its potential returns per unit of risk. Itron Inc is currently generating about 0.29 per unit of risk. If you would invest  6,195  in Trimble on April 29, 2025 and sell it today you would earn a total of  2,312  from holding Trimble or generate 37.32% return on investment over 90 days.

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

Trimble  vs.  Itron Inc

Trimble

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Trimble are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Trimble sustained 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 Trimble and Itron

The main advantage of trading using opposite Trimble and Itron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimble 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 Trimble 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.