Correlation Between Progress Software and NetScout Systems
Can any of the company-specific risk be diversified away by investing in both Progress Software and NetScout Systems 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 Progress Software and NetScout Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progress Software and NetScout Systems, you can compare the effects of market volatilities on Progress Software and NetScout Systems 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 Progress Software with a short position of NetScout Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progress Software and NetScout Systems.
Diversification Opportunities for Progress Software and NetScout Systems
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Progress and NetScout is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Progress Software and NetScout Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetScout Systems and Progress Software 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 Progress Software are associated (or correlated) with NetScout Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetScout Systems has no effect on the direction of Progress Software i.e., Progress Software and NetScout Systems go up and down completely randomly.
Pair Corralation between Progress Software and NetScout Systems
Given the investment horizon of 90 days Progress Software is expected to under-perform the NetScout Systems. In addition to that, Progress Software is 1.29 times more volatile than NetScout Systems. It trades about -0.01 of its total potential returns per unit of risk. NetScout Systems is currently generating about 0.25 per unit of volatility. If you would invest 1,931 in NetScout Systems on April 4, 2025 and sell it today you would earn a total of 570.00 from holding NetScout Systems or generate 29.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progress Software vs. NetScout Systems
Performance |
| Timeline |
| Progress Software |
| NetScout Systems |
Progress Software and NetScout Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progress Software and NetScout Systems
The main advantage of trading using opposite Progress Software and NetScout Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progress Software position performs unexpectedly, NetScout Systems 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 NetScout Systems will offset losses from the drop in NetScout Systems' long position.| Progress Software vs. Take Two Interactive Software | Progress Software vs. SohuCom | Progress Software vs. Gravity Co | Progress Software vs. Roblox Corp |
| NetScout Systems vs. Western Midstream Partners | NetScout Systems vs. SEI Investments | NetScout Systems vs. Agro Capital Management | NetScout Systems vs. United Utilities Group |
Check out your portfolio center.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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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