Correlation Between Parsons Corp and Cantaloupe

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

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

Diversification Opportunities for Parsons Corp and Cantaloupe

-0.01

Correlation Coefficient

Parsons Corp  Cantaloupe

Good diversification

The 3 months correlation between Parsons and Cantaloupe is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Parsons Corp and Cantaloupe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantaloupe and Parsons Corp 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 Parsons Corp are associated (or correlated) with Cantaloupe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantaloupe has no effect on the direction of Parsons Corp i.e., Parsons Corp and Cantaloupe go up and down completely randomly.

Pair Corralation between Parsons Corp and Cantaloupe

Considering the 90-day investment horizon Parsons Corp is expected to under-perform the Cantaloupe. But the stock apears to be less risky and, when comparing its historical volatility, Parsons Corp is 1.13 times less risky than Cantaloupe. The stock trades about -0.25 of its potential returns per unit of risk. The Cantaloupe is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  960.00  in Cantaloupe on December 30, 2024 and sell it today you would lose (203.00) from holding Cantaloupe or give up 21.15% of portfolio value over 90 days.

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

Parsons Corp  vs.  Cantaloupe

Parsons Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Parsons Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic 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.

Cantaloupe

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cantaloupe has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Parsons Corp and Cantaloupe

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

The idea behind Parsons Corp and Cantaloupe 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.