Correlation Between Pioneer Power and Insignia Systems

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

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

Diversification Opportunities for Pioneer Power and Insignia Systems

0.0

Correlation Coefficient

Pioneer Power  Insignia Systems

Pay attention - limited upside

The 3 months correlation between Pioneer and Insignia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Power Solutions and Insignia Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Systems and Pioneer Power 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 Pioneer Power Solutions are associated (or correlated) with Insignia Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Systems has no effect on the direction of Pioneer Power i.e., Pioneer Power and Insignia Systems go up and down completely randomly.

Pair Corralation between Pioneer Power and Insignia Systems

If you would invest (100.00) in Insignia Systems on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Insignia Systems or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pioneer Power Solutions  vs.  Insignia Systems

Pioneer Power Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Power Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Insignia Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insignia Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Insignia Systems is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pioneer Power and Insignia Systems

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

The idea behind Pioneer Power Solutions and Insignia 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.