Correlation Between ProStar Holdings and INX Digital

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

By analyzing existing cross correlation between ProStar Holdings and The INX Digital, you can compare the effects of market volatilities on ProStar Holdings and INX Digital 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 INX Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProStar Holdings and INX Digital.

Diversification Opportunities for ProStar Holdings and INX Digital

-0.29

Correlation Coefficient

ProStar Holdings  INX Digital

Very good diversification

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

Pair Corralation between ProStar Holdings and INX Digital

Assuming the 90 days horizon ProStar Holdings is expected to generate 1.49 times more return on investment than INX Digital. However, ProStar Holdings is 1.49 times more volatile than The INX Digital. It trades about 0.06 of its potential returns per unit of risk. The INX Digital is currently generating about -0.01 per unit of risk. If you would invest  8.10  in ProStar Holdings on August 1, 2025 and sell it today you would earn a total of  0.40  from holding ProStar Holdings or generate 4.94% return on investment over 90 days.

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

ProStar Holdings  vs.  The INX Digital

ProStar Holdings

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in ProStar Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ProStar Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

INX Digital

Risk-Adjusted Performance

Weakest

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

Pair Trading with ProStar Holdings and INX Digital

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

The idea behind ProStar Holdings and The INX Digital 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.