Correlation Between LifeSpeak and ProStar Holdings
Can any of the company-specific risk be diversified away by investing in both LifeSpeak and ProStar 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 LifeSpeak and ProStar Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LifeSpeak and ProStar Holdings, you can compare the effects of market volatilities on LifeSpeak and ProStar 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 LifeSpeak with a short position of ProStar Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifeSpeak and ProStar Holdings.
Diversification Opportunities for LifeSpeak and ProStar Holdings
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LifeSpeak and ProStar is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding LifeSpeak and ProStar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProStar Holdings and LifeSpeak 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 LifeSpeak are associated (or correlated) with ProStar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProStar Holdings has no effect on the direction of LifeSpeak i.e., LifeSpeak and ProStar Holdings go up and down completely randomly.
Pair Corralation between LifeSpeak and ProStar Holdings
Assuming the 90 days horizon LifeSpeak is expected to under-perform the ProStar Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, LifeSpeak is 1.23 times less risky than ProStar Holdings. The pink sheet trades about 0.0 of its potential returns per unit of risk. The ProStar Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 15.00 in ProStar Holdings on September 2, 2024 and sell it today you would lose (7.00) from holding ProStar Holdings or give up 46.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LifeSpeak vs. ProStar Holdings
Performance |
| Timeline |
| LifeSpeak |
| ProStar Holdings |
LifeSpeak and ProStar Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LifeSpeak and ProStar Holdings
The main advantage of trading using opposite LifeSpeak and ProStar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LifeSpeak position performs unexpectedly, ProStar 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 ProStar Holdings will offset losses from the drop in ProStar Holdings' long position.The idea behind LifeSpeak and ProStar 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.| ProStar Holdings vs. Waldencast Acquisition Corp | ProStar Holdings vs. Alkami Technology | ProStar Holdings vs. ADEIA P | ProStar Holdings vs. Paycor HCM |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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