Correlation Between Aware and ProntoForms

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

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

Diversification Opportunities for Aware and ProntoForms

0.0

Correlation Coefficient

Aware  ProntoForms

Pay attention - limited upside

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

Pair Corralation between Aware and ProntoForms

If you would invest  36.00  in ProntoForms on September 12, 2024 and sell it today you would earn a total of  0.00  from holding ProntoForms or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Aware Inc  vs.  ProntoForms

Aware Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aware Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

ProntoForms

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Aware and ProntoForms

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

The idea behind Aware Inc and ProntoForms 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.