Correlation Between Propel Holdings and EcoSynthetix

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

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

Diversification Opportunities for Propel Holdings and EcoSynthetix

-0.31

Correlation Coefficient

Propel Holdings  EcoSynthetix

Very good diversification

The 3 months correlation between Propel and EcoSynthetix is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Propel Holdings and EcoSynthetix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EcoSynthetix and Propel Holdings 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 Propel Holdings are associated (or correlated) with EcoSynthetix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EcoSynthetix has no effect on the direction of Propel Holdings i.e., Propel Holdings and EcoSynthetix go up and down completely randomly.

Pair Corralation between Propel Holdings and EcoSynthetix

Assuming the 90 days trading horizon Propel Holdings is expected to under-perform the EcoSynthetix. In addition to that, Propel Holdings is 1.41 times more volatile than EcoSynthetix. It trades about -0.16 of its total potential returns per unit of risk. EcoSynthetix is currently generating about 0.03 per unit of volatility. If you would invest  422.00  in EcoSynthetix on December 25, 2024 and sell it today you would earn a total of  13.00  from holding EcoSynthetix or generate 3.08% return on investment over 90 days.

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

Propel Holdings  vs.  EcoSynthetix

Propel Holdings

Risk-Adjusted Performance

Very Weak

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

EcoSynthetix

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EcoSynthetix are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, EcoSynthetix is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Propel Holdings and EcoSynthetix

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

The idea behind Propel Holdings and EcoSynthetix 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.