Correlation Between Manhattan Associates and Powerschool Holdings

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

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

Diversification Opportunities for Manhattan Associates and Powerschool Holdings

0.33

Correlation Coefficient

Manhattan Associates  Powerschool Holdings

Weak diversification

The 3 months correlation between Manhattan and Powerschool is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Associates and Powerschool Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerschool Holdings and Manhattan Associates 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 Manhattan Associates 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 Manhattan Associates i.e., Manhattan Associates and Powerschool Holdings go up and down completely randomly.

Pair Corralation between Manhattan Associates and Powerschool Holdings

Given the investment horizon of 90 days Manhattan Associates is expected to generate 15.35 times more return on investment than Powerschool Holdings. However, Manhattan Associates is 15.35 times more volatile than Powerschool Holdings. It trades about 0.07 of its potential returns per unit of risk. Powerschool Holdings is currently generating about 0.22 per unit of risk. If you would invest  24,148  in Manhattan Associates on September 21, 2024 and sell it today you would earn a total of  4,106  from holding Manhattan Associates or generate 17.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	56.35%
Values	Daily Returns

Manhattan Associates  vs.  Powerschool Holdings

Manhattan Associates

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Manhattan Associates is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Powerschool Holdings

Risk-Adjusted Performance

0 of 100

Good

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 Manhattan Associates and Powerschool Holdings

The main advantage of trading using opposite Manhattan Associates and Powerschool Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan Associates 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 Manhattan Associates 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.