Correlation Between D2L and Propel Holdings
Can any of the company-specific risk be diversified away by investing in both D2L 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 D2L and Propel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between D2L Inc and Propel Holdings, you can compare the effects of market volatilities on D2L 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 D2L with a short position of Propel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of D2L and Propel Holdings.
Diversification Opportunities for D2L and Propel Holdings
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between D2L and Propel is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding D2L Inc and Propel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Propel Holdings and D2L 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 D2L Inc 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 D2L i.e., D2L and Propel Holdings go up and down completely randomly.
Pair Corralation between D2L and Propel Holdings
Assuming the 90 days trading horizon D2L Inc is expected to generate 0.7 times more return on investment than Propel Holdings. However, D2L Inc is 1.43 times less risky than Propel Holdings. It trades about 0.15 of its potential returns per unit of risk. Propel Holdings is currently generating about -0.46 per unit of risk. If you would invest 1,892 in D2L Inc on November 28, 2024 and sell it today you would earn a total of 120.00 from holding D2L Inc or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
D2L Inc vs. Propel Holdings
Performance |
| Timeline |
| D2L Inc |
| Propel Holdings |
D2L and Propel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with D2L and Propel Holdings
The main advantage of trading using opposite D2L and Propel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if D2L 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.The idea behind D2L Inc and Propel Holdings 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.| 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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