Correlation Between Dexterra and Propel Holdings
Can any of the company-specific risk be diversified away by investing in both Dexterra 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 Dexterra and Propel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dexterra Group and Propel Holdings, you can compare the effects of market volatilities on Dexterra 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 Dexterra with a short position of Propel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexterra and Propel Holdings.
Diversification Opportunities for Dexterra and Propel Holdings
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dexterra and Propel is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dexterra Group and Propel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Propel Holdings and Dexterra 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 Dexterra Group 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 Dexterra i.e., Dexterra and Propel Holdings go up and down completely randomly.
Pair Corralation between Dexterra and Propel Holdings
Assuming the 90 days trading horizon Dexterra Group is expected to under-perform the Propel Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Dexterra Group is 1.61 times less risky than Propel Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Propel Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,657 in Propel Holdings on October 23, 2024 and sell it today you would earn a total of 2.00 from holding Propel Holdings or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexterra Group vs. Propel Holdings
Performance |
| Timeline |
| Dexterra Group |
| Propel Holdings |
Dexterra and Propel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexterra and Propel Holdings
The main advantage of trading using opposite Dexterra and Propel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexterra 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.| Dexterra vs. Doman Building Materials | Dexterra vs. Topaz Energy Corp | Dexterra vs. Bird Construction | Dexterra vs. Alaris Equity Partners |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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