Correlation Between AnalytixInsight and Fintech Select

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

By analyzing existing cross correlation between AnalytixInsight and Fintech Select, you can compare the effects of market volatilities on AnalytixInsight and Fintech Select 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 Fintech Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of AnalytixInsight and Fintech Select.

Diversification Opportunities for AnalytixInsight and Fintech Select

-0.58

Correlation Coefficient

AnalytixInsight  Fintech Select

Excellent diversification

The 3 months correlation between AnalytixInsight and Fintech is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AnalytixInsight and Fintech Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fintech Select 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 Fintech Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fintech Select has no effect on the direction of AnalytixInsight i.e., AnalytixInsight and Fintech Select go up and down completely randomly.

Pair Corralation between AnalytixInsight and Fintech Select

Assuming the 90 days horizon AnalytixInsight is expected to generate 18.74 times less return on investment than Fintech Select. But when comparing it to its historical volatility, AnalytixInsight is 1.08 times less risky than Fintech Select. It trades about 0.01 of its potential returns per unit of risk. Fintech Select is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Fintech Select on September 5, 2024 and sell it today you would earn a total of  0.50  from holding Fintech Select or generate 16.67% return on investment over 90 days.

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

AnalytixInsight  vs.  Fintech Select

AnalytixInsight

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AnalytixInsight has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, AnalytixInsight may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Fintech Select

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fintech Select are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Fintech Select showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AnalytixInsight and Fintech Select

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

The idea behind AnalytixInsight and Fintech Select 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.