Correlation Between Amphenol and Insight Enterprises

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

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

Diversification Opportunities for Amphenol and Insight Enterprises

0.35

Correlation Coefficient

Amphenol  Insight Enterprises

Weak diversification

The 3 months correlation between Amphenol and Insight is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amphenol and Insight Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insight Enterprises and Amphenol 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 Amphenol 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 Amphenol i.e., Amphenol and Insight Enterprises go up and down completely randomly.

Pair Corralation between Amphenol and Insight Enterprises

Considering the 90-day investment horizon Amphenol is expected to generate 0.43 times more return on investment than Insight Enterprises. However, Amphenol is 2.32 times less risky than Insight Enterprises. It trades about 0.37 of its potential returns per unit of risk. Insight Enterprises is currently generating about -0.04 per unit of risk. If you would invest  7,957  in Amphenol on May 6, 2025 and sell it today you would earn a total of  2,474  from holding Amphenol or generate 31.09% return on investment over 90 days.

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

Amphenol  vs.  Insight Enterprises

Amphenol

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Amphenol demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 latest unfluctuating performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Amphenol and Insight Enterprises

The main advantage of trading using opposite Amphenol and Insight Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amphenol 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 Amphenol 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.