Correlation Between CoreCard Corp and Powerschool Holdings

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

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

Diversification Opportunities for CoreCard Corp and Powerschool Holdings

0.56

Correlation Coefficient

CoreCard Corp  Powerschool Holdings

Very weak diversification

The 3 months correlation between CoreCard and Powerschool is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding CoreCard Corp and Powerschool Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerschool Holdings 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 Powerschool Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerschool Holdings has no effect on the direction of CoreCard Corp i.e., CoreCard Corp and Powerschool Holdings go up and down completely randomly.

Pair Corralation between CoreCard Corp and Powerschool Holdings

Given the investment horizon of 90 days CoreCard Corp is expected to generate 37.03 times more return on investment than Powerschool Holdings. However, CoreCard Corp is 37.03 times more volatile than Powerschool Holdings. It trades about 0.25 of its potential returns per unit of risk. Powerschool Holdings is currently generating about 0.36 per unit of risk. If you would invest  1,400  in CoreCard Corp on September 3, 2024 and sell it today you would earn a total of  698.00  from holding CoreCard Corp or generate 49.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	34.38%
Values	Daily Returns

CoreCard Corp  vs.  Powerschool Holdings

CoreCard Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCard Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, CoreCard Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Powerschool Holdings

Risk-Adjusted Performance

0 of 100

Strong

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

Pair Trading with CoreCard Corp and Powerschool Holdings

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

The idea behind CoreCard Corp and Powerschool 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.