Correlation Between Patrick Industries and PROS Holdings

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

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

Diversification Opportunities for Patrick Industries and PROS Holdings

-0.34

Correlation Coefficient

Patrick Industries  PROS Holdings

Very good diversification

The 3 months correlation between Patrick and PROS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Patrick Industries and PROS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROS Holdings and Patrick Industries 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 Patrick Industries are associated (or correlated) with PROS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROS Holdings has no effect on the direction of Patrick Industries i.e., Patrick Industries and PROS Holdings go up and down completely randomly.

Pair Corralation between Patrick Industries and PROS Holdings

Given the investment horizon of 90 days Patrick Industries is expected to generate 0.62 times more return on investment than PROS Holdings. However, Patrick Industries is 1.62 times less risky than PROS Holdings. It trades about 0.19 of its potential returns per unit of risk. PROS Holdings is currently generating about 0.0 per unit of risk. If you would invest  8,121  in Patrick Industries on May 1, 2025 and sell it today you would earn a total of  2,008  from holding Patrick Industries or generate 24.73% return on investment over 90 days.

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

Patrick Industries  vs.  PROS Holdings

Patrick Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Patrick Industries are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Patrick Industries disclosed solid returns over the last few months and may actually be approaching a breakup point.

PROS Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days PROS Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, PROS Holdings is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Patrick Industries and PROS Holdings

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

The idea behind Patrick Industries and PROS Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.