Correlation Between Insight Acquisition and Kingswood Acquisition

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

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

Diversification Opportunities for Insight Acquisition and Kingswood Acquisition

0.29

Correlation Coefficient

Insight Acquisition  Kingswood Acquisition

Modest diversification

The 3 months correlation between Insight and Kingswood is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Insight Acquisition Corp and Kingswood Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingswood Acquisition and Insight Acquisition 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 Insight Acquisition Corp are associated (or correlated) with Kingswood Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingswood Acquisition has no effect on the direction of Insight Acquisition i.e., Insight Acquisition and Kingswood Acquisition go up and down completely randomly.

Pair Corralation between Insight Acquisition and Kingswood Acquisition

If you would invest  1,042  in Insight Acquisition Corp on September 5, 2024 and sell it today you would earn a total of  78.00  from holding Insight Acquisition Corp or generate 7.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Insight Acquisition Corp  vs.  Kingswood Acquisition Corp

Insight Acquisition Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Insight Acquisition Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Insight Acquisition may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kingswood Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingswood Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Kingswood Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Insight Acquisition and Kingswood Acquisition

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

The idea behind Insight Acquisition Corp and Kingswood Acquisition Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.