Correlation Between Momentive Global and ProStar Holdings

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

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

Diversification Opportunities for Momentive Global and ProStar Holdings

-0.43

Correlation Coefficient

Momentive Global  ProStar Holdings

Very good diversification

The 3 months correlation between Momentive and ProStar is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Momentive Global and ProStar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProStar Holdings and Momentive Global 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 Momentive Global 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 Momentive Global i.e., Momentive Global and ProStar Holdings go up and down completely randomly.

Pair Corralation between Momentive Global and ProStar Holdings

If you would invest  945.00  in Momentive Global on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Momentive Global or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Momentive Global  vs.  ProStar Holdings

Momentive Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Momentive Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Momentive Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated 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 abnormal 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 Momentive Global and ProStar Holdings

The main advantage of trading using opposite Momentive Global and ProStar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentive Global 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 Momentive Global 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 CEOs Directory module to screen CEOs from public companies around the world.