Correlation Between HP and Intouch Insight

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

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

Diversification Opportunities for HP and Intouch Insight

-0.82

Correlation Coefficient

HP  Intouch Insight

Pay attention - limited upside

The 3 months correlation between HP and Intouch is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Intouch Insight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intouch Insight and HP 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 HP Inc are associated (or correlated) with Intouch Insight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intouch Insight has no effect on the direction of HP i.e., HP and Intouch Insight go up and down completely randomly.

Pair Corralation between HP and Intouch Insight

Considering the 90-day investment horizon HP Inc is expected to generate 0.6 times more return on investment than Intouch Insight. However, HP Inc is 1.68 times less risky than Intouch Insight. It trades about 0.05 of its potential returns per unit of risk. Intouch Insight is currently generating about -0.07 per unit of risk. If you would invest  2,547  in HP Inc on July 10, 2025 and sell it today you would earn a total of  108.00  from holding HP Inc or generate 4.24% return on investment over 90 days.

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

HP Inc  vs.  Intouch Insight

HP Inc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in HP Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, HP is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Intouch Insight

Risk-Adjusted Performance

Weakest

Over the last 90 days Intouch Insight has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with HP and Intouch Insight

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

The idea behind HP Inc and Intouch Insight 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.

Check out your portfolio center.

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.