Correlation Between Small Cap and Ping Identity

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

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

Diversification Opportunities for Small Cap and Ping Identity

0.0

Correlation Coefficient

Small Cap  Ping Identity

Pay attention - limited upside

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

Pair Corralation between Small Cap and Ping Identity

If you would invest  2,418  in Small Cap Premium on December 26, 2024 and sell it today you would earn a total of  42.00  from holding Small Cap Premium or generate 1.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Small Cap Premium  vs.  Ping Identity Holding

Small Cap Premium

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Premium are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Small Cap is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ping Identity Holding

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Small Cap and Ping Identity

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

The idea behind Small Cap Premium and Ping Identity Holding 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.