Correlation Between Model N and CoreCard Corp

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

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

Diversification Opportunities for Model N and CoreCard Corp

0.22

Correlation Coefficient

Model N  CoreCard Corp

Modest diversification

The 3 months correlation between Model and CoreCard is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Model N and CoreCard Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoreCard Corp and Model N 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 Model N are associated (or correlated) with CoreCard Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoreCard Corp has no effect on the direction of Model N i.e., Model N and CoreCard Corp go up and down completely randomly.

Pair Corralation between Model N and CoreCard Corp

If you would invest  1,400  in CoreCard Corp on September 2, 2024 and sell it today you would earn a total of  698.00  from holding CoreCard Corp or generate 49.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Model N  vs.  CoreCard Corp

Model N

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Model N has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Model N is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CoreCard Corp

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in CoreCard Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, CoreCard Corp exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Model N and CoreCard Corp

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

The idea behind Model N and CoreCard Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.