Correlation Between Corsair Gaming and PSI Software

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Can any of the company-specific risk be diversified away by investing in both Corsair Gaming and PSI Software 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 Corsair Gaming and PSI Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corsair Gaming and PSI Software AG, you can compare the effects of market volatilities on Corsair Gaming and PSI Software 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 Corsair Gaming with a short position of PSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corsair Gaming and PSI Software.

Diversification Opportunities for Corsair Gaming and PSI Software

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between Corsair and PSI is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and PSI Software AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSI Software AG and Corsair Gaming 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 Corsair Gaming are associated (or correlated) with PSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSI Software AG has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and PSI Software go up and down completely randomly.

Pair Corralation between Corsair Gaming and PSI Software

Assuming the 90 days horizon Corsair Gaming is expected to under-perform the PSI Software. In addition to that, Corsair Gaming is 1.38 times more volatile than PSI Software AG. It trades about -0.07 of its total potential returns per unit of risk. PSI Software AG is currently generating about -0.05 per unit of volatility. If you would invest  3,450  in PSI Software AG on August 31, 2024 and sell it today you would lose (1,270) from holding PSI Software AG or give up 36.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.74%
ValuesDaily Returns

Corsair Gaming  vs.  PSI Software AG

 Performance 
       Timeline  
Corsair Gaming 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.
PSI Software AG 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PSI Software AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PSI Software is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Corsair Gaming and PSI Software Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Corsair Gaming and PSI Software

The main advantage of trading using opposite Corsair Gaming and PSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corsair Gaming position performs unexpectedly, PSI Software 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 PSI Software will offset losses from the drop in PSI Software's long position.
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The idea behind Corsair Gaming and PSI Software AG 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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