Correlation Between Model N and Park City

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

By analyzing existing cross correlation between Model N and Park City Group, you can compare the effects of market volatilities on Model N and Park City 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 Park City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Model N and Park City.

Diversification Opportunities for Model N and Park City

0.0

Correlation Coefficient

Model N  Park City

Pay attention - limited upside

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

Pair Corralation between Model N and Park City

If you would invest (100.00) in Park City Group on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Park City Group or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Model N  vs.  Park City Group

Model N

Risk-Adjusted Performance

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.

Park City Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Park City Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Park City is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Model N and Park City

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

The idea behind Model N and Park City Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..