Correlation Between PROS Holdings and Model N
Can any of the company-specific risk be diversified away by investing in both PROS Holdings and Model N 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 PROS Holdings and Model N into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PROS Holdings and Model N, you can compare the effects of market volatilities on PROS Holdings and Model N 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 PROS Holdings with a short position of Model N. Check out your portfolio center. Please also check ongoing floating volatility patterns of PROS Holdings and Model N.
Diversification Opportunities for PROS Holdings and Model N
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PROS and Model is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding PROS Holdings and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N and PROS 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 PROS Holdings are associated (or correlated) with Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of PROS Holdings i.e., PROS Holdings and Model N go up and down completely randomly.
Pair Corralation between PROS Holdings and Model N
If you would invest 1,907 in PROS Holdings on August 27, 2024 and sell it today you would earn a total of 485.00 from holding PROS Holdings or generate 25.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
PROS Holdings vs. Model N
Performance |
| Timeline |
| PROS Holdings |
| Model N |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PROS Holdings and Model N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PROS Holdings and Model N
The main advantage of trading using opposite PROS Holdings and Model N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PROS Holdings position performs unexpectedly, Model N 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 Model N will offset losses from the drop in Model N's long position.The idea behind PROS Holdings and Model N 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.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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