Correlation Between Progyny and Goodrx Holdings
Can any of the company-specific risk be diversified away by investing in both Progyny and Goodrx 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 Progyny and Goodrx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progyny and Goodrx Holdings, you can compare the effects of market volatilities on Progyny and Goodrx 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 Progyny with a short position of Goodrx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progyny and Goodrx Holdings.
Diversification Opportunities for Progyny and Goodrx Holdings
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Progyny and Goodrx is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Progyny and Goodrx Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodrx Holdings and Progyny 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 Progyny are associated (or correlated) with Goodrx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodrx Holdings has no effect on the direction of Progyny i.e., Progyny and Goodrx Holdings go up and down completely randomly.
Pair Corralation between Progyny and Goodrx Holdings
Given the investment horizon of 90 days Progyny is expected to under-perform the Goodrx Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Progyny is 1.27 times less risky than Goodrx Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Goodrx Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 536.00 in Goodrx Holdings on August 24, 2024 and sell it today you would lose (107.00) from holding Goodrx Holdings or give up 19.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progyny vs. Goodrx Holdings
Performance |
| Timeline |
| Progyny |
| Goodrx Holdings |
Progyny and Goodrx Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progyny and Goodrx Holdings
The main advantage of trading using opposite Progyny and Goodrx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progyny position performs unexpectedly, Goodrx 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 Goodrx Holdings will offset losses from the drop in Goodrx Holdings' long position.| Progyny vs. Veeva Systems Class | Progyny vs. Teladoc | Progyny vs. Goodrx Holdings | Progyny vs. 10X Genomics |
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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