Correlation Between CP ALL and Prodigy Public

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

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

Diversification Opportunities for CP ALL and Prodigy Public

0.43

Correlation Coefficient

CP ALL  Prodigy Public

Very weak diversification

The 3 months correlation between CPALL and Prodigy is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CP ALL Public and Prodigy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prodigy Public and CP ALL 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 CP ALL Public are associated (or correlated) with Prodigy Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prodigy Public has no effect on the direction of CP ALL i.e., CP ALL and Prodigy Public go up and down completely randomly.

Pair Corralation between CP ALL and Prodigy Public

Assuming the 90 days trading horizon CP ALL Public is expected to under-perform the Prodigy Public. But the stock apears to be less risky and, when comparing its historical volatility, CP ALL Public is 34.07 times less risky than Prodigy Public. The stock trades about -0.02 of its potential returns per unit of risk. The Prodigy Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  322.00  in Prodigy Public on October 10, 2024 and sell it today you would lose (64.00) from holding Prodigy Public or give up 19.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.37%
Values	Daily Returns

CP ALL Public  vs.  Prodigy Public

CP ALL Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CP ALL Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Prodigy Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prodigy Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Prodigy Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CP ALL and Prodigy Public

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

The idea behind CP ALL Public and Prodigy Public 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 CEOs Directory module to screen CEOs from public companies around the world.