Correlation Between Analog Integrations and INPAQ Technology

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

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

Diversification Opportunities for Analog Integrations and INPAQ Technology

0.69

Correlation Coefficient

Analog Integrations  INPAQ Technology

Poor diversification

The 3 months correlation between Analog and INPAQ is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Analog Integrations and INPAQ Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INPAQ Technology and Analog Integrations 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 Analog Integrations are associated (or correlated) with INPAQ Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INPAQ Technology has no effect on the direction of Analog Integrations i.e., Analog Integrations and INPAQ Technology go up and down completely randomly.

Pair Corralation between Analog Integrations and INPAQ Technology

Assuming the 90 days trading horizon Analog Integrations is expected to generate 1.6 times more return on investment than INPAQ Technology. However, Analog Integrations is 1.6 times more volatile than INPAQ Technology Co. It trades about 0.1 of its potential returns per unit of risk. INPAQ Technology Co is currently generating about 0.1 per unit of risk. If you would invest  9,070  in Analog Integrations on September 21, 2024 and sell it today you would earn a total of  530.00  from holding Analog Integrations or generate 5.84% return on investment over 90 days.

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

Analog Integrations  vs.  INPAQ Technology Co

Analog Integrations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Analog Integrations 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

INPAQ Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INPAQ Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, INPAQ Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Analog Integrations and INPAQ Technology

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

The idea behind Analog Integrations and INPAQ Technology Co 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.