Correlation Between Software Acquisition and Integral

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

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

Diversification Opportunities for Software Acquisition and Integral

-0.33

Correlation Coefficient

Software Acquisition  Integral

Very good diversification

The 3 months correlation between Software and Integral is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Software Acquisition Group and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science and Software Acquisition 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 Software Acquisition Group are associated (or correlated) with Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of Software Acquisition i.e., Software Acquisition and Integral go up and down completely randomly.

Pair Corralation between Software Acquisition and Integral

Assuming the 90 days horizon Software Acquisition Group is expected to generate 12.89 times more return on investment than Integral. However, Software Acquisition is 12.89 times more volatile than Integral Ad Science. It trades about 0.09 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.22 per unit of risk. If you would invest  1.42  in Software Acquisition Group on April 23, 2025 and sell it today you would lose (0.19) from holding Software Acquisition Group or give up 13.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	50.82%
Values	Daily Returns

Software Acquisition Group  vs.  Integral Ad Science

Software Acquisition

Risk-Adjusted Performance

OK

Over the last 90 days Software Acquisition Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unsteady technical and fundamental indicators, Software Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Integral Ad Science

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Integral unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Software Acquisition and Integral

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

The idea behind Software Acquisition Group and Integral Ad Science 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.