Correlation Between Progress Software and Cognex
Can any of the company-specific risk be diversified away by investing in both Progress Software and Cognex 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 Progress Software and Cognex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progress Software and Cognex, you can compare the effects of market volatilities on Progress Software and Cognex 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 Progress Software with a short position of Cognex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progress Software and Cognex.
Diversification Opportunities for Progress Software and Cognex
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Progress and Cognex is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Progress Software and Cognex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognex and Progress Software 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 Progress Software are associated (or correlated) with Cognex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognex has no effect on the direction of Progress Software i.e., Progress Software and Cognex go up and down completely randomly.
Pair Corralation between Progress Software and Cognex
Given the investment horizon of 90 days Progress Software is expected to generate 0.7 times more return on investment than Cognex. However, Progress Software is 1.43 times less risky than Cognex. It trades about 0.06 of its potential returns per unit of risk. Cognex is currently generating about 0.03 per unit of risk. If you would invest 5,737 in Progress Software on August 29, 2024 and sell it today you would earn a total of 1,227 from holding Progress Software or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progress Software vs. Cognex
Performance |
| Timeline |
| Progress Software |
| Cognex |
Progress Software and Cognex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progress Software and Cognex
The main advantage of trading using opposite Progress Software and Cognex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progress Software position performs unexpectedly, Cognex 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 Cognex will offset losses from the drop in Cognex's long position.| Progress Software vs. ePlus inc | Progress Software vs. Agilysys | Progress Software vs. Sapiens International | Progress Software vs. PDF Solutions |
| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex vs. MKS Instruments |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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