Correlation Between AnalytixInsight and Haivision Systems

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

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

Diversification Opportunities for AnalytixInsight and Haivision Systems

0.25

Correlation Coefficient

AnalytixInsight  Haivision Systems

Modest diversification

The 3 months correlation between AnalytixInsight and Haivision is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding AnalytixInsight and Haivision Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haivision Systems and AnalytixInsight 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 AnalytixInsight are associated (or correlated) with Haivision Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haivision Systems has no effect on the direction of AnalytixInsight i.e., AnalytixInsight and Haivision Systems go up and down completely randomly.

Pair Corralation between AnalytixInsight and Haivision Systems

Assuming the 90 days horizon AnalytixInsight is expected to generate 5.27 times more return on investment than Haivision Systems. However, AnalytixInsight is 5.27 times more volatile than Haivision Systems. It trades about 0.05 of its potential returns per unit of risk. Haivision Systems is currently generating about 0.06 per unit of risk. If you would invest  9.50  in AnalytixInsight on October 8, 2024 and sell it today you would lose (5.50) from holding AnalytixInsight or give up 57.89% of portfolio value over 90 days.

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

AnalytixInsight  vs.  Haivision Systems

AnalytixInsight

Risk-Adjusted Performance

13 of 100

Good

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

Haivision Systems

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Haivision Systems are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Haivision Systems displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AnalytixInsight and Haivision Systems

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

The idea behind AnalytixInsight and Haivision Systems 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.