Correlation Between Thinkific Labs and Pegasystems

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

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

Diversification Opportunities for Thinkific Labs and Pegasystems

0.82

Correlation Coefficient

Thinkific Labs  Pegasystems

Very poor diversification

The 3 months correlation between Thinkific and Pegasystems is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Thinkific Labs and Pegasystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasystems and Thinkific Labs 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 Thinkific Labs are associated (or correlated) with Pegasystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasystems has no effect on the direction of Thinkific Labs i.e., Thinkific Labs and Pegasystems go up and down completely randomly.

Pair Corralation between Thinkific Labs and Pegasystems

Assuming the 90 days horizon Thinkific Labs is expected to generate 1.6 times less return on investment than Pegasystems. In addition to that, Thinkific Labs is 1.13 times more volatile than Pegasystems. It trades about 0.04 of its total potential returns per unit of risk. Pegasystems is currently generating about 0.08 per unit of volatility. If you would invest  3,792  in Pegasystems on October 11, 2024 and sell it today you would earn a total of  5,817  from holding Pegasystems or generate 153.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.6%
Values	Daily Returns

Thinkific Labs  vs.  Pegasystems

Thinkific Labs

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thinkific Labs are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Thinkific Labs may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pegasystems

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pegasystems are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Pegasystems sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thinkific Labs and Pegasystems

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

The idea behind Thinkific Labs and Pegasystems 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.