Correlation Between Elcom International and Pegasystems
Can any of the company-specific risk be diversified away by investing in both Elcom International and Pegasystems 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 Elcom International and Pegasystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elcom International and Pegasystems, you can compare the effects of market volatilities on Elcom International and Pegasystems 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 Elcom International with a short position of Pegasystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elcom International and Pegasystems.
Diversification Opportunities for Elcom International and Pegasystems
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elcom and Pegasystems is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Elcom International and Pegasystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasystems and Elcom International 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 Elcom International are associated (or correlated) with Pegasystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasystems has no effect on the direction of Elcom International i.e., Elcom International and Pegasystems go up and down completely randomly.
Pair Corralation between Elcom International and Pegasystems
If you would invest 4,962 in Pegasystems on August 29, 2024 and sell it today you would earn a total of 4,683 from holding Pegasystems or generate 94.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.48% |
| Values | Daily Returns |
Elcom International vs. Pegasystems
Performance |
| Timeline |
| Elcom International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pegasystems |
Elcom International and Pegasystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elcom International and Pegasystems
The main advantage of trading using opposite Elcom International and Pegasystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elcom International position performs unexpectedly, Pegasystems 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 Pegasystems will offset losses from the drop in Pegasystems' long position.| Elcom International vs. NuGene International | Elcom International vs. Zoom Video Communications | Elcom International vs. Bowmo Inc | Elcom International vs. Epazz Inc |
| Pegasystems vs. Wex Inc | Pegasystems vs. Cognex | Pegasystems vs. Progress Software | Pegasystems vs. Fair Isaac |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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