Correlation Between Vontier Corp and Ituran Location

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Can any of the company-specific risk be diversified away by investing in both Vontier Corp 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 Vontier Corp and Ituran Location into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vontier Corp and Ituran Location and, you can compare the effects of market volatilities on Vontier Corp 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 Vontier Corp with a short position of Ituran Location. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vontier Corp and Ituran Location.

Diversification Opportunities for Vontier Corp and Ituran Location

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Vontier and Ituran is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Vontier Corp and Ituran Location and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ituran Location and Vontier Corp 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 Vontier Corp 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 Vontier Corp i.e., Vontier Corp and Ituran Location go up and down completely randomly.

Pair Corralation between Vontier Corp and Ituran Location

Considering the 90-day investment horizon Vontier Corp is expected to generate 0.94 times more return on investment than Ituran Location. However, Vontier Corp is 1.06 times less risky than Ituran Location. It trades about 0.21 of its potential returns per unit of risk. Ituran Location and is currently generating about 0.12 per unit of risk. If you would invest  3,341  in Vontier Corp on May 5, 2025 and sell it today you would earn a total of  698.00  from holding Vontier Corp or generate 20.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Vontier Corp  vs.  Ituran Location and

 Performance 
       Timeline  
Vontier Corp 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Vontier Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Vontier Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.
Ituran Location 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ituran Location and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Ituran Location may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Vontier Corp and Ituran Location Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Vontier Corp and Ituran Location

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

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