Correlation Between REGAL ASIAN and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN 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 REGAL ASIAN and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on REGAL ASIAN 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 REGAL ASIAN with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and PKSHA TECHNOLOGY.
Diversification Opportunities for REGAL ASIAN and PKSHA TECHNOLOGY
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and PKSHA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS 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 REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between REGAL ASIAN and PKSHA TECHNOLOGY
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the PKSHA TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, REGAL ASIAN INVESTMENTS is 2.34 times less risky than PKSHA TECHNOLOGY. The stock trades about -0.21 of its potential returns per unit of risk. The PKSHA TECHNOLOGY INC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,120 in PKSHA TECHNOLOGY INC on September 1, 2024 and sell it today you would earn a total of 320.00 from holding PKSHA TECHNOLOGY INC or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| PKSHA TECHNOLOGY INC |
REGAL ASIAN and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and PKSHA TECHNOLOGY
The main advantage of trading using opposite REGAL ASIAN and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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.| REGAL ASIAN vs. PennantPark Investment | REGAL ASIAN vs. SEI INVESTMENTS | REGAL ASIAN vs. MARKET VECTR RETAIL | REGAL ASIAN vs. Strategic Investments AS |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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