Correlation Between Converge Technology and Propel Holdings
Can any of the company-specific risk be diversified away by investing in both Converge Technology and Propel Holdings 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 Converge Technology and Propel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Technology Solutions and Propel Holdings, you can compare the effects of market volatilities on Converge Technology and Propel Holdings 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 Converge Technology with a short position of Propel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Technology and Propel Holdings.
Diversification Opportunities for Converge Technology and Propel Holdings
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Converge and Propel is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Converge Technology Solutions and Propel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Propel Holdings and Converge Technology 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 Converge Technology Solutions are associated (or correlated) with Propel Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Propel Holdings has no effect on the direction of Converge Technology i.e., Converge Technology and Propel Holdings go up and down completely randomly.
Pair Corralation between Converge Technology and Propel Holdings
Assuming the 90 days trading horizon Converge Technology is expected to generate 84.94 times less return on investment than Propel Holdings. In addition to that, Converge Technology is 1.08 times more volatile than Propel Holdings. It trades about 0.0 of its total potential returns per unit of risk. Propel Holdings is currently generating about 0.13 per unit of volatility. If you would invest 657.00 in Propel Holdings on August 28, 2024 and sell it today you would earn a total of 3,040 from holding Propel Holdings or generate 462.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Converge Technology Solutions vs. Propel Holdings
Performance |
| Timeline |
| Converge Technology |
| Propel Holdings |
Converge Technology and Propel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Technology and Propel Holdings
The main advantage of trading using opposite Converge Technology and Propel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Technology position performs unexpectedly, Propel Holdings 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 Propel Holdings will offset losses from the drop in Propel Holdings' long position.| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
| Propel Holdings vs. Sangoma Technologies Corp | Propel Holdings vs. Vitalhub Corp | Propel Holdings vs. Converge Technology Solutions |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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