Correlation Between ProntoForms and Protek Capital

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

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

Diversification Opportunities for ProntoForms and Protek Capital

-1.0

Correlation Coefficient

ProntoForms  Protek Capital

Pay attention - limited upside

The 3 months correlation between ProntoForms and Protek is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding ProntoForms and Protek Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protek Capital and ProntoForms 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 ProntoForms are associated (or correlated) with Protek Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protek Capital has no effect on the direction of ProntoForms i.e., ProntoForms and Protek Capital go up and down completely randomly.

Pair Corralation between ProntoForms and Protek Capital

If you would invest  36.00  in ProntoForms on September 4, 2024 and sell it today you would earn a total of  0.00  from holding ProntoForms or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Strong
Accuracy	1.56%
Values	Daily Returns

ProntoForms  vs.  Protek Capital

ProntoForms

Risk-Adjusted Performance

0 of 100

Very Weak

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

Protek Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Protek Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ProntoForms and Protek Capital

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

The idea behind ProntoForms and Protek Capital 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.