Correlation Between Progate and Forcecon Technology

Can any of the company-specific risk be diversified away by investing in both Progate and Forcecon Technology 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 Progate and Forcecon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Progate Group and Forcecon Technology Co, you can compare the effects of market volatilities on Progate and Forcecon Technology 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 Progate with a short position of Forcecon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progate and Forcecon Technology.

Diversification Opportunities for Progate and Forcecon Technology

0.75

Correlation Coefficient

Progate  Forcecon Technology

Poor diversification

The 3 months correlation between Progate and Forcecon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Progate Group and Forcecon Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forcecon Technology and Progate 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 Progate Group are associated (or correlated) with Forcecon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forcecon Technology has no effect on the direction of Progate i.e., Progate and Forcecon Technology go up and down completely randomly.

Pair Corralation between Progate and Forcecon Technology

Assuming the 90 days trading horizon Progate Group is expected to under-perform the Forcecon Technology. In addition to that, Progate is 1.15 times more volatile than Forcecon Technology Co. It trades about -0.07 of its total potential returns per unit of risk. Forcecon Technology Co is currently generating about -0.01 per unit of volatility. If you would invest  16,350  in Forcecon Technology Co on September 16, 2024 and sell it today you would lose (500.00) from holding Forcecon Technology Co or give up 3.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Progate Group  vs.  Forcecon Technology Co

Progate Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Progate Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Forcecon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forcecon Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Forcecon Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Progate and Forcecon Technology

The main advantage of trading using opposite Progate and Forcecon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progate position performs unexpectedly, Forcecon Technology 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 Forcecon Technology will offset losses from the drop in Forcecon Technology's long position.

The idea behind Progate Group and Forcecon Technology Co 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.