Correlation Between Pro Dex and Video Display

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

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

Diversification Opportunities for Pro Dex and Video Display

0.06

Correlation Coefficient

Pro Dex  Video Display

Significant diversification

The 3 months correlation between Pro and Video is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pro Dex and Video Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Video Display and Pro Dex 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 Pro Dex are associated (or correlated) with Video Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Video Display has no effect on the direction of Pro Dex i.e., Pro Dex and Video Display go up and down completely randomly.

Pair Corralation between Pro Dex and Video Display

If you would invest  4,781  in Pro Dex on September 15, 2024 and sell it today you would earn a total of  163.00  from holding Pro Dex or generate 3.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Pro Dex  vs.  Video Display

Pro Dex

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Dex are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pro Dex showed solid returns over the last few months and may actually be approaching a breakup point.

Video Display

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Video Display has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Video Display is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pro Dex and Video Display

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

The idea behind Pro Dex and Video Display 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 Commodity Directory module to find actively traded commodities issued by global exchanges.