Correlation Between RIWI Corp and Progress Software

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

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

Diversification Opportunities for RIWI Corp and Progress Software

-0.29

Correlation Coefficient

RIWI Corp  Progress Software

Very good diversification

The 3 months correlation between RIWI and Progress is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding RIWI Corp and Progress Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progress Software and RIWI Corp 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 RIWI Corp are associated (or correlated) with Progress Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progress Software has no effect on the direction of RIWI Corp i.e., RIWI Corp and Progress Software go up and down completely randomly.

Pair Corralation between RIWI Corp and Progress Software

Assuming the 90 days horizon RIWI Corp is expected to under-perform the Progress Software. In addition to that, RIWI Corp is 1.59 times more volatile than Progress Software. It trades about -0.09 of its total potential returns per unit of risk. Progress Software is currently generating about 0.15 per unit of volatility. If you would invest  5,816  in Progress Software on September 15, 2024 and sell it today you would earn a total of  1,074  from holding Progress Software or generate 18.47% return on investment over 90 days.

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

RIWI Corp  vs.  Progress Software

RIWI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RIWI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating 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.

Progress Software

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progress Software are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Progress Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RIWI Corp and Progress Software

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

The idea behind RIWI Corp and Progress Software 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.