Correlation Between Progress Software and Insight Enterprises

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

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

Diversification Opportunities for Progress Software and Insight Enterprises

-0.55

Correlation Coefficient

Progress Software  Insight Enterprises

Excellent diversification

The 3 months correlation between Progress and Insight is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Progress Software and Insight Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insight Enterprises and Progress Software 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 Progress Software are associated (or correlated) with Insight Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insight Enterprises has no effect on the direction of Progress Software i.e., Progress Software and Insight Enterprises go up and down completely randomly.

Pair Corralation between Progress Software and Insight Enterprises

Given the investment horizon of 90 days Progress Software is expected to under-perform the Insight Enterprises. In addition to that, Progress Software is 1.22 times more volatile than Insight Enterprises. It trades about -0.18 of its total potential returns per unit of risk. Insight Enterprises is currently generating about -0.04 per unit of volatility. If you would invest  16,038  in Insight Enterprises on December 2, 2024 and sell it today you would lose (650.00) from holding Insight Enterprises or give up 4.05% of portfolio value over 90 days.

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

Progress Software  vs.  Insight Enterprises

Progress Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Progress Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Insight Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insight Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Insight Enterprises is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Progress Software and Insight Enterprises

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

The idea behind Progress Software and Insight Enterprises 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..