Correlation Between AMSWA Old and PROS Holdings

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

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

Diversification Opportunities for AMSWA Old and PROS Holdings

0.64

Correlation Coefficient

AMSWA Old  PROS Holdings

Poor diversification

The 3 months correlation between AMSWA and PROS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding AMSWA Old and PROS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROS Holdings and AMSWA Old 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 AMSWA Old are associated (or correlated) with PROS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROS Holdings has no effect on the direction of AMSWA Old i.e., AMSWA Old and PROS Holdings go up and down completely randomly.

Pair Corralation between AMSWA Old and PROS Holdings

If you would invest  1,856  in PROS Holdings on October 25, 2024 and sell it today you would earn a total of  537.00  from holding PROS Holdings or generate 28.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.69%
Values	Daily Returns

AMSWA Old  vs.  PROS Holdings

AMSWA Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMSWA Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AMSWA Old is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

PROS Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PROS Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, PROS Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMSWA Old and PROS Holdings

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

The idea behind AMSWA Old and PROS Holdings 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.