Delta Correlation Analysis

Curious if following insider buys or sells can be profitable? This report might surprise you.

Delta measures the difference between insider buy and sell turnover in USD. Delta can be considered like a balance (positive when there are many buy transactions or negative when sell transactions prevail). Our dynamic chart explores the correlation between this delta and annual stock performance.

Please pay attention to the last bar in the chart. It shows the highest correlation, 0.7-1.

Key points:

• Only about 10% of companies show a high correlation between delta and stock performance.
• This correlation isn't constant; it changes over time because insider behavior is not a static process.

In other words, this report answers the question "Can I trust what insiders do?" using the phrase "Only in X% of cases."

And also note the first bar, which represents a high negative correlation: if an insider buys, the stock falls; if an insider sells, the stock rises. Analyzing transactions of such insiders without seeing the bigger picture can be extremely confusing.

Delta correlation and delta annual turnover is updated on a daily basis and available in our API.

NB:

The main purpose of this report (and many others) is to demonstrate that there is a need to have a tool that can filter out unnecessary data to let you make decisions based on facts.

Please keep in mind that the findings of this study are based on data from the countries covered by SIT. For more details on our global coverage, click here.