Correlation Between Progate and Sunspring Metal
Can any of the company-specific risk be diversified away by investing in both Progate and Sunspring Metal 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 Progate and Sunspring Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progate Group and Sunspring Metal Corp, you can compare the effects of market volatilities on Progate and Sunspring Metal 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 Progate with a short position of Sunspring Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progate and Sunspring Metal.
Diversification Opportunities for Progate and Sunspring Metal
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Progate and Sunspring is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Progate Group and Sunspring Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunspring Metal Corp and Progate 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 Progate Group are associated (or correlated) with Sunspring Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunspring Metal Corp has no effect on the direction of Progate i.e., Progate and Sunspring Metal go up and down completely randomly.
Pair Corralation between Progate and Sunspring Metal
Assuming the 90 days trading horizon Progate Group is expected to under-perform the Sunspring Metal. In addition to that, Progate is 1.03 times more volatile than Sunspring Metal Corp. It trades about -0.14 of its total potential returns per unit of risk. Sunspring Metal Corp is currently generating about 0.01 per unit of volatility. If you would invest 3,340 in Sunspring Metal Corp on September 1, 2024 and sell it today you would lose (15.00) from holding Sunspring Metal Corp or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progate Group vs. Sunspring Metal Corp
Performance |
| Timeline |
| Progate Group |
| Sunspring Metal Corp |
Progate and Sunspring Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progate and Sunspring Metal
The main advantage of trading using opposite Progate and Sunspring Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progate position performs unexpectedly, Sunspring Metal 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 Sunspring Metal will offset losses from the drop in Sunspring Metal's long position.| Progate vs. Niko Semiconductor Co | Progate vs. WIN Semiconductors | Progate vs. Sheng Yu Steel | Progate vs. Elite Semiconductor Memory |
| Sunspring Metal vs. Makalot Industrial Co | Sunspring Metal vs. Eternal Materials Co | Sunspring Metal vs. Feng Tay Enterprises | Sunspring Metal vs. Taiwan Fu Hsing |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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