Correlation Between Procore Technologies and Alight

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

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

Diversification Opportunities for Procore Technologies and Alight

0.52

Correlation Coefficient

Procore Technologies  Alight

Very weak diversification

The 3 months correlation between Procore and Alight is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Procore Technologies and Alight Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alight Inc and Procore Technologies 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 Procore Technologies are associated (or correlated) with Alight. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alight Inc has no effect on the direction of Procore Technologies i.e., Procore Technologies and Alight go up and down completely randomly.

Pair Corralation between Procore Technologies and Alight

Given the investment horizon of 90 days Procore Technologies is expected to generate 1.81 times more return on investment than Alight. However, Procore Technologies is 1.81 times more volatile than Alight Inc. It trades about 0.16 of its potential returns per unit of risk. Alight Inc is currently generating about -0.35 per unit of risk. If you would invest  7,026  in Procore Technologies on September 21, 2024 and sell it today you would earn a total of  627.00  from holding Procore Technologies or generate 8.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Procore Technologies  vs.  Alight Inc

Procore Technologies

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Procore Technologies are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Procore Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Alight Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Procore Technologies and Alight

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

The idea behind Procore Technologies and Alight Inc 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.