Correlation Between Topicus and Propel Holdings
Can any of the company-specific risk be diversified away by investing in both Topicus and Propel 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 Topicus and Propel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Topicus and Propel Holdings, you can compare the effects of market volatilities on Topicus and Propel 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 Topicus with a short position of Propel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Topicus and Propel Holdings.
Diversification Opportunities for Topicus and Propel Holdings
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Topicus and Propel is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Topicus and Propel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Propel Holdings and Topicus 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 Topicus are associated (or correlated) with Propel Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Propel Holdings has no effect on the direction of Topicus i.e., Topicus and Propel Holdings go up and down completely randomly.
Pair Corralation between Topicus and Propel Holdings
Assuming the 90 days horizon Topicus is expected to under-perform the Propel Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Topicus is 3.33 times less risky than Propel Holdings. The stock trades about -0.14 of its potential returns per unit of risk. The Propel Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,480 in Propel Holdings on August 28, 2024 and sell it today you would earn a total of 217.00 from holding Propel Holdings or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Topicus vs. Propel Holdings
Performance |
| Timeline |
| Topicus |
| Propel Holdings |
Topicus and Propel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Topicus and Propel Holdings
The main advantage of trading using opposite Topicus and Propel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Topicus position performs unexpectedly, Propel 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 Propel Holdings will offset losses from the drop in Propel Holdings' long position.| Topicus vs. Telus Corp | Topicus vs. Toronto Dominion Bank | Topicus vs. Manulife Financial Corp | Topicus vs. Canadian Natural Resources |
| Propel Holdings vs. Sangoma Technologies Corp | Propel Holdings vs. Vitalhub Corp | Propel Holdings vs. Converge Technology Solutions |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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