Correlation Between Progress Software and GainClients

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

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

Diversification Opportunities for Progress Software and GainClients

0.0

Correlation Coefficient

Progress Software  GainClients

Pay attention - limited upside

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

Pair Corralation between Progress Software and GainClients

Given the investment horizon of 90 days Progress Software is expected to generate 33.09 times less return on investment than GainClients. But when comparing it to its historical volatility, Progress Software is 30.06 times less risky than GainClients. It trades about 0.04 of its potential returns per unit of risk. GainClients is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  0.68  in GainClients on October 11, 2024 and sell it today you would lose (0.67) from holding GainClients or give up 98.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Progress Software  vs.  GainClients

Progress Software

Risk-Adjusted Performance

0 of 100

Very Weak

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

GainClients

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Progress Software and GainClients

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

The idea behind Progress Software and GainClients 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.