Correlation Between Bill Holdings and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Bill Holdings and PKSHA TECHNOLOGY 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 Bill Holdings and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bill Holdings and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on Bill Holdings and PKSHA TECHNOLOGY 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 Bill Holdings with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bill Holdings and PKSHA TECHNOLOGY.
Diversification Opportunities for Bill Holdings and PKSHA TECHNOLOGY
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bill and PKSHA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bill Holdings and PKSHA TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKSHA TECHNOLOGY INC and Bill 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 Bill Holdings are associated (or correlated) with PKSHA TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKSHA TECHNOLOGY INC has no effect on the direction of Bill Holdings i.e., Bill Holdings and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between Bill Holdings and PKSHA TECHNOLOGY
Assuming the 90 days horizon Bill Holdings is expected to generate 1.4 times more return on investment than PKSHA TECHNOLOGY. However, Bill Holdings is 1.4 times more volatile than PKSHA TECHNOLOGY INC. It trades about 0.53 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about 0.1 per unit of risk. If you would invest 5,226 in Bill Holdings on August 30, 2024 and sell it today you would earn a total of 3,479 from holding Bill Holdings or generate 66.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bill Holdings vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| Bill Holdings |
| PKSHA TECHNOLOGY INC |
Bill Holdings and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bill Holdings and PKSHA TECHNOLOGY
The main advantage of trading using opposite Bill Holdings and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bill Holdings position performs unexpectedly, PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY will offset losses from the drop in PKSHA TECHNOLOGY's long position.| Bill Holdings vs. SALESFORCE INC CDR | Bill Holdings vs. Entravision Communications | Bill Holdings vs. INTERSHOP Communications Aktiengesellschaft | Bill Holdings vs. CarsalesCom |
| PKSHA TECHNOLOGY vs. Microsoft | PKSHA TECHNOLOGY vs. Adobe Inc | PKSHA TECHNOLOGY vs. Square Inc | PKSHA TECHNOLOGY vs. Adyen NV |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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