Correlation Between Cadence Design and INTNED

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

By analyzing existing cross correlation between Cadence Design Systems and INTNED 3869 28 MAR 26, you can compare the effects of market volatilities on Cadence Design and INTNED 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 Cadence Design with a short position of INTNED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Design and INTNED.

Diversification Opportunities for Cadence Design and INTNED

-0.02

Correlation Coefficient

Cadence Design  INTNED

Good diversification

The 3 months correlation between Cadence and INTNED is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Design Systems and INTNED 3869 28 MAR 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTNED 3869 28 and Cadence Design 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 Cadence Design Systems are associated (or correlated) with INTNED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTNED 3869 28 has no effect on the direction of Cadence Design i.e., Cadence Design and INTNED go up and down completely randomly.

Pair Corralation between Cadence Design and INTNED

Given the investment horizon of 90 days Cadence Design Systems is expected to generate 3.83 times more return on investment than INTNED. However, Cadence Design is 3.83 times more volatile than INTNED 3869 28 MAR 26. It trades about 0.14 of its potential returns per unit of risk. INTNED 3869 28 MAR 26 is currently generating about -0.14 per unit of risk. If you would invest  25,315  in Cadence Design Systems on October 21, 2024 and sell it today you would earn a total of  5,245  from holding Cadence Design Systems or generate 20.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	67.74%
Values	Daily Returns

Cadence Design Systems  vs.  INTNED 3869 28 MAR 26

Cadence Design Systems

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cadence Design Systems are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Cadence Design unveiled solid returns over the last few months and may actually be approaching a breakup point.

INTNED 3869 28

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTNED 3869 28 MAR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, INTNED is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cadence Design and INTNED

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

The idea behind Cadence Design Systems and INTNED 3869 28 MAR 26 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.