Correlation Between CoreCard Corp and Model N

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

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

Diversification Opportunities for CoreCard Corp and Model N

0.0

Correlation Coefficient

CoreCard Corp  Model N

Pay attention - limited upside

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

Pair Corralation between CoreCard Corp and Model N

If you would invest (100.00) in Model N on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Model N or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CoreCard Corp  vs.  Model N

CoreCard Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CoreCard Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CoreCard Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Model N

Risk-Adjusted Performance

Very Weak

Over the last 90 days Model N has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Model N is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CoreCard Corp and Model N

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

The idea behind CoreCard Corp and Model N 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.