Correlation Between Propel Holdings and JEMTEC
Can any of the company-specific risk be diversified away by investing in both Propel Holdings and JEMTEC 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 Propel Holdings and JEMTEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Propel Holdings and JEMTEC Inc, you can compare the effects of market volatilities on Propel Holdings and JEMTEC 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 Propel Holdings with a short position of JEMTEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Propel Holdings and JEMTEC.
Diversification Opportunities for Propel Holdings and JEMTEC
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Propel and JEMTEC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Propel Holdings and JEMTEC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JEMTEC Inc and Propel Holdings 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 Propel Holdings are associated (or correlated) with JEMTEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JEMTEC Inc has no effect on the direction of Propel Holdings i.e., Propel Holdings and JEMTEC go up and down completely randomly.
Pair Corralation between Propel Holdings and JEMTEC
Assuming the 90 days trading horizon Propel Holdings is expected to generate 2.72 times less return on investment than JEMTEC. But when comparing it to its historical volatility, Propel Holdings is 1.36 times less risky than JEMTEC. It trades about 0.09 of its potential returns per unit of risk. JEMTEC Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 65.00 in JEMTEC Inc on September 13, 2024 and sell it today you would earn a total of 21.00 from holding JEMTEC Inc or generate 32.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Propel Holdings vs. JEMTEC Inc
Performance |
| Timeline |
| Propel Holdings |
| JEMTEC Inc |
Propel Holdings and JEMTEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Propel Holdings and JEMTEC
The main advantage of trading using opposite Propel Holdings and JEMTEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Propel Holdings position performs unexpectedly, JEMTEC 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 JEMTEC will offset losses from the drop in JEMTEC's long position.| Propel Holdings vs. Sangoma Technologies Corp | Propel Holdings vs. Vitalhub Corp | Propel Holdings vs. Converge Technology Solutions |
| JEMTEC vs. Goodfood Market Corp | JEMTEC vs. Cogeco Communications | JEMTEC vs. CVW CleanTech | JEMTEC vs. Verizon Communications CDR |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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