Correlation Between Accolade and Progyny

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

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

Diversification Opportunities for Accolade and Progyny

0.94

Correlation Coefficient

Accolade  Progyny

Almost no diversification

The 3 months correlation between Accolade and Progyny is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Accolade and Progyny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progyny and Accolade 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 Accolade are associated (or correlated) with Progyny. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progyny has no effect on the direction of Accolade i.e., Accolade and Progyny go up and down completely randomly.

Pair Corralation between Accolade and Progyny

Given the investment horizon of 90 days Accolade is expected to generate 4.45 times more return on investment than Progyny. However, Accolade is 4.45 times more volatile than Progyny. It trades about 0.11 of its potential returns per unit of risk. Progyny is currently generating about 0.22 per unit of risk. If you would invest  386.00  in Accolade on November 28, 2024 and sell it today you would earn a total of  309.50  from holding Accolade or generate 80.18% return on investment over 90 days.

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

Accolade  vs.  Progyny

Accolade

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Accolade are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Accolade exhibited solid returns over the last few months and may actually be approaching a breakup point.

Progyny

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Progyny are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Progyny showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Accolade and Progyny

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

The idea behind Accolade and Progyny 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.