Correlation Between Progyny and Accolade

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

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

Diversification Opportunities for Progyny and Accolade

0.85

Correlation Coefficient

Progyny  Accolade

Very poor diversification

The 3 months correlation between Progyny and Accolade is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Progyny and Accolade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accolade and Progyny 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 Progyny are associated (or correlated) with Accolade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accolade has no effect on the direction of Progyny i.e., Progyny and Accolade go up and down completely randomly.

Pair Corralation between Progyny and Accolade

Given the investment horizon of 90 days Progyny is expected to generate 3.8 times less return on investment than Accolade. But when comparing it to its historical volatility, Progyny is 5.8 times less risky than Accolade. It trades about 0.19 of its potential returns per unit of risk. Accolade is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  344.00  in Accolade on December 30, 2024 and sell it today you would earn a total of  355.00  from holding Accolade or generate 103.2% return on investment over 90 days.

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

Progyny  vs.  Accolade

Progyny

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progyny are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Progyny showed solid returns over the last few months and may actually be approaching a breakup point.

Accolade

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Accolade are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, Accolade exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Progyny and Accolade

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

The idea behind Progyny and Accolade 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.