Correlation Between Insyde Software and New Advanced

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

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

Diversification Opportunities for Insyde Software and New Advanced

-0.24

Correlation Coefficient

Insyde Software  New Advanced

Very good diversification

The 3 months correlation between Insyde and New is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Insyde Software and New Advanced Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Advanced Electronics and Insyde Software 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 Insyde Software are associated (or correlated) with New Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Advanced Electronics has no effect on the direction of Insyde Software i.e., Insyde Software and New Advanced go up and down completely randomly.

Pair Corralation between Insyde Software and New Advanced

Assuming the 90 days trading horizon Insyde Software is expected to under-perform the New Advanced. In addition to that, Insyde Software is 1.63 times more volatile than New Advanced Electronics. It trades about -0.11 of its total potential returns per unit of risk. New Advanced Electronics is currently generating about 0.17 per unit of volatility. If you would invest  5,250  in New Advanced Electronics on December 22, 2024 and sell it today you would earn a total of  1,100  from holding New Advanced Electronics or generate 20.95% return on investment over 90 days.

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

Insyde Software  vs.  New Advanced Electronics

Insyde Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insyde Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

New Advanced Electronics

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in New Advanced Electronics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, New Advanced showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Insyde Software and New Advanced

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

The idea behind Insyde Software and New Advanced Electronics 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..