Correlation Between Pegasystems and TrackX Holdings

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

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

Diversification Opportunities for Pegasystems and TrackX Holdings

0.0

Correlation Coefficient

Pegasystems  TrackX Holdings

Pay attention - limited upside

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

Pair Corralation between Pegasystems and TrackX Holdings

Given the investment horizon of 90 days Pegasystems is expected to generate 35.4 times less return on investment than TrackX Holdings. But when comparing it to its historical volatility, Pegasystems is 31.07 times less risky than TrackX Holdings. It trades about 0.08 of its potential returns per unit of risk. TrackX Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.49  in TrackX Holdings on October 11, 2024 and sell it today you would lose (0.37) from holding TrackX Holdings or give up 75.51% of portfolio value over 90 days.

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

Pegasystems  vs.  TrackX Holdings

Pegasystems

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pegasystems are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Pegasystems sustained solid returns over the last few months and may actually be approaching a breakup point.

TrackX Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pegasystems and TrackX Holdings

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

The idea behind Pegasystems and TrackX Holdings 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.