Correlation Between ACI Worldwide and Progress Software

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

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

Diversification Opportunities for ACI Worldwide and Progress Software

0.47

Correlation Coefficient

ACI Worldwide  Progress Software

Very weak diversification

The 3 months correlation between ACI and Progress is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ACI Worldwide and Progress Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progress Software and ACI Worldwide 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 ACI Worldwide 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 ACI Worldwide i.e., ACI Worldwide and Progress Software go up and down completely randomly.

Pair Corralation between ACI Worldwide and Progress Software

Given the investment horizon of 90 days ACI Worldwide is expected to under-perform the Progress Software. But the stock apears to be less risky and, when comparing its historical volatility, ACI Worldwide is 1.02 times less risky than Progress Software. The stock trades about -0.2 of its potential returns per unit of risk. The Progress Software is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest  6,068  in Progress Software on May 4, 2025 and sell it today you would lose (1,464) from holding Progress Software or give up 24.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

ACI Worldwide  vs.  Progress Software

ACI Worldwide

Risk-Adjusted Performance

Very Weak

Over the last 90 days ACI Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Progress Software

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ACI Worldwide and Progress Software

The main advantage of trading using opposite ACI Worldwide and Progress Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACI Worldwide 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 ACI Worldwide 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.