Correlation Between PROS Holdings and PDF Solutions

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

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

Diversification Opportunities for PROS Holdings and PDF Solutions

-0.49

Correlation Coefficient

PROS Holdings  PDF Solutions

Very good diversification

The 3 months correlation between PROS and PDF is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PROS Holdings and PDF Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDF Solutions and PROS 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 PROS Holdings are associated (or correlated) with PDF Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDF Solutions has no effect on the direction of PROS Holdings i.e., PROS Holdings and PDF Solutions go up and down completely randomly.

Pair Corralation between PROS Holdings and PDF Solutions

Considering the 90-day investment horizon PROS Holdings is expected to under-perform the PDF Solutions. In addition to that, PROS Holdings is 1.26 times more volatile than PDF Solutions. It trades about -0.05 of its total potential returns per unit of risk. PDF Solutions is currently generating about 0.09 per unit of volatility. If you would invest  1,960  in PDF Solutions on May 8, 2025 and sell it today you would earn a total of  263.50  from holding PDF Solutions or generate 13.44% return on investment over 90 days.

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

PROS Holdings  vs.  PDF Solutions

PROS Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days PROS Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

PDF Solutions

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in PDF Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, PDF Solutions unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PROS Holdings and PDF Solutions

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

The idea behind PROS Holdings and PDF Solutions 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.