Correlation Between Maptelligent and Pegasystems

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

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

Diversification Opportunities for Maptelligent and Pegasystems

-0.69

Correlation Coefficient

Maptelligent  Pegasystems

Excellent diversification

The 3 months correlation between Maptelligent and Pegasystems is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Maptelligent and Pegasystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasystems and Maptelligent 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 Maptelligent are associated (or correlated) with Pegasystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasystems has no effect on the direction of Maptelligent i.e., Maptelligent and Pegasystems go up and down completely randomly.

Pair Corralation between Maptelligent and Pegasystems

Given the investment horizon of 90 days Maptelligent is expected to generate 15.09 times more return on investment than Pegasystems. However, Maptelligent is 15.09 times more volatile than Pegasystems. It trades about 0.03 of its potential returns per unit of risk. Pegasystems is currently generating about 0.28 per unit of risk. If you would invest  0.04  in Maptelligent on October 25, 2024 and sell it today you would lose (0.03) from holding Maptelligent or give up 75.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Maptelligent  vs.  Pegasystems

Maptelligent

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Maptelligent are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Maptelligent unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pegasystems

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pegasystems are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Pegasystems sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maptelligent and Pegasystems

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

The idea behind Maptelligent and Pegasystems 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.