Correlation Between Progressive Planet and A Cap

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

By analyzing existing cross correlation between Progressive Planet Solutions and A Cap Energy Limited, you can compare the effects of market volatilities on Progressive Planet and A Cap 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 Progressive Planet with a short position of A Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive Planet and A Cap.

Diversification Opportunities for Progressive Planet and A Cap

0.0

Correlation Coefficient

Progressive Planet  A Cap

Pay attention - limited upside

The 3 months correlation between Progressive and APCDF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Progressive Planet Solutions and A Cap Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A Cap Energy and Progressive Planet 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 Progressive Planet Solutions are associated (or correlated) with A Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A Cap Energy has no effect on the direction of Progressive Planet i.e., Progressive Planet and A Cap go up and down completely randomly.

Pair Corralation between Progressive Planet and A Cap

Assuming the 90 days horizon Progressive Planet is expected to generate 76.68 times less return on investment than A Cap. But when comparing it to its historical volatility, Progressive Planet Solutions is 4.35 times less risky than A Cap. It trades about 0.0 of its potential returns per unit of risk. A Cap Energy Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1.00  in A Cap Energy Limited on October 26, 2024 and sell it today you would earn a total of  1.60  from holding A Cap Energy Limited or generate 160.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	23.48%
Values	Daily Returns

Progressive Planet Solutions  vs.  A Cap Energy Limited

Progressive Planet

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Planet Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Progressive Planet reported solid returns over the last few months and may actually be approaching a breakup point.

A Cap Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A Cap Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, A Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Progressive Planet and A Cap

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

The idea behind Progressive Planet Solutions and A Cap Energy Limited 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.