Correlation Between ProStar Holdings and Adcore

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

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

Diversification Opportunities for ProStar Holdings and Adcore

0.27

Correlation Coefficient

ProStar Holdings  Adcore

Modest diversification

The 3 months correlation between ProStar and Adcore is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ProStar Holdings and Adcore Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adcore Inc and ProStar Holdings 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 ProStar Holdings are associated (or correlated) with Adcore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adcore Inc has no effect on the direction of ProStar Holdings i.e., ProStar Holdings and Adcore go up and down completely randomly.

Pair Corralation between ProStar Holdings and Adcore

Assuming the 90 days horizon ProStar Holdings is expected to under-perform the Adcore. But the otc stock apears to be less risky and, when comparing its historical volatility, ProStar Holdings is 1.8 times less risky than Adcore. The otc stock trades about -0.18 of its potential returns per unit of risk. The Adcore Inc is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Adcore Inc on September 1, 2024 and sell it today you would lose (2.00) from holding Adcore Inc or give up 14.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

ProStar Holdings  vs.  Adcore Inc

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 December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Adcore Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adcore Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with ProStar Holdings and Adcore

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

The idea behind ProStar Holdings and Adcore Inc 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.