Correlation Between Model N and Progress Software

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

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

Diversification Opportunities for Model N and Progress Software

0.0

Correlation Coefficient

Model N  Progress Software

Pay attention - limited upside

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

Pair Corralation between Model N and Progress Software

If you would invest  3,000  in Model N on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Model N or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Model N  vs.  Progress Software

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.

Progress Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Progress Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Progress Software is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Model N and Progress Software

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

The idea behind Model N and Progress Software 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.