Correlation Between Intuit and ProStar Holdings

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

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

Diversification Opportunities for Intuit and ProStar Holdings

-0.36

Correlation Coefficient

Intuit  ProStar Holdings

Very good diversification

The 3 months correlation between Intuit and ProStar is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Intuit Inc and ProStar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProStar Holdings and Intuit 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 Intuit Inc are associated (or correlated) with ProStar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProStar Holdings has no effect on the direction of Intuit i.e., Intuit and ProStar Holdings go up and down completely randomly.

Pair Corralation between Intuit and ProStar Holdings

Given the investment horizon of 90 days Intuit Inc is expected to generate 0.27 times more return on investment than ProStar Holdings. However, Intuit Inc is 3.71 times less risky than ProStar Holdings. It trades about -0.15 of its potential returns per unit of risk. ProStar Holdings is currently generating about -0.08 per unit of risk. If you would invest  69,735  in Intuit Inc on September 12, 2024 and sell it today you would lose (5,028) from holding Intuit Inc or give up 7.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intuit Inc  vs.  ProStar Holdings

Intuit Inc

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Intuit Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Intuit is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

ProStar Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProStar Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Intuit and ProStar Holdings

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

The idea behind Intuit Inc and ProStar 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.