Correlation Between Sharps Technology and Pro Dex

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

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

Diversification Opportunities for Sharps Technology and Pro Dex

0.52

Correlation Coefficient

Sharps Technology  Pro Dex

Very weak diversification

The 3 months correlation between Sharps and Pro is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sharps Technology and Pro Dex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro Dex and Sharps Technology 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 Sharps Technology are associated (or correlated) with Pro Dex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro Dex has no effect on the direction of Sharps Technology i.e., Sharps Technology and Pro Dex go up and down completely randomly.

Pair Corralation between Sharps Technology and Pro Dex

Given the investment horizon of 90 days Sharps Technology is expected to under-perform the Pro Dex. In addition to that, Sharps Technology is 2.84 times more volatile than Pro Dex. It trades about -0.15 of its total potential returns per unit of risk. Pro Dex is currently generating about 0.03 per unit of volatility. If you would invest  4,930  in Pro Dex on December 27, 2024 and sell it today you would earn a total of  11.00  from holding Pro Dex or generate 0.22% return on investment over 90 days.

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

Sharps Technology  vs.  Pro Dex

Sharps Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sharps Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pro Dex

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pro Dex are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Pro Dex may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sharps Technology and Pro Dex

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

The idea behind Sharps Technology and Pro Dex 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.