Correlation Between Momentive Global and PROS Holdings

Can any of the company-specific risk be diversified away by investing in both Momentive Global and PROS 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 PROS 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 PROS Holdings, you can compare the effects of market volatilities on Momentive Global and PROS 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 PROS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Momentive Global and PROS Holdings.

Diversification Opportunities for Momentive Global and PROS Holdings

0.0

Correlation Coefficient

Momentive Global  PROS Holdings

Pay attention - limited upside

The 3 months correlation between Momentive and PROS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Momentive Global and PROS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROS 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 PROS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROS Holdings has no effect on the direction of Momentive Global i.e., Momentive Global and PROS Holdings go up and down completely randomly.

Pair Corralation between Momentive Global and PROS Holdings

If you would invest  2,423  in PROS Holdings on November 28, 2024 and sell it today you would earn a total of  79.00  from holding PROS Holdings or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Momentive Global  vs.  PROS Holdings

Momentive Global

Risk-Adjusted Performance

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.

PROS Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PROS Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, PROS Holdings may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Momentive Global and PROS Holdings

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

The idea behind Momentive Global and PROS 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.