Correlation Between ProStar Holdings and Ackroo

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

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

Diversification Opportunities for ProStar Holdings and Ackroo

-0.13

Correlation Coefficient

ProStar Holdings  Ackroo

Good diversification

The 3 months correlation between ProStar and Ackroo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding ProStar Holdings and Ackroo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ackroo Inc and ProStar Holdings 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 ProStar Holdings are associated (or correlated) with Ackroo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ackroo Inc has no effect on the direction of ProStar Holdings i.e., ProStar Holdings and Ackroo go up and down completely randomly.

Pair Corralation between ProStar Holdings and Ackroo

Assuming the 90 days horizon ProStar Holdings is expected to under-perform the Ackroo. In addition to that, ProStar Holdings is 1.43 times more volatile than Ackroo Inc. It trades about -0.12 of its total potential returns per unit of risk. Ackroo Inc is currently generating about 0.01 per unit of volatility. If you would invest  9.00  in Ackroo Inc on September 13, 2024 and sell it today you would lose (0.39) from holding Ackroo Inc or give up 4.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

ProStar Holdings  vs.  Ackroo Inc

ProStar Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ProStar Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Ackroo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with ProStar Holdings and Ackroo

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

The idea behind ProStar Holdings and Ackroo Inc 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.