Correlation Between PKSHA TECHNOLOGY and National Storage
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and National Storage 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 PKSHA TECHNOLOGY and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and National Storage Affiliates, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and National Storage 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 PKSHA TECHNOLOGY with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and National Storage.
Diversification Opportunities for PKSHA TECHNOLOGY and National Storage
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PKSHA and National is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and National Storage Affiliates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage Aff and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC are associated (or correlated) with National Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storage Aff has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and National Storage go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and National Storage
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 2.06 times more return on investment than National Storage. However, PKSHA TECHNOLOGY is 2.06 times more volatile than National Storage Affiliates. It trades about 0.06 of its potential returns per unit of risk. National Storage Affiliates is currently generating about 0.04 per unit of risk. If you would invest 1,220 in PKSHA TECHNOLOGY INC on September 4, 2024 and sell it today you would earn a total of 1,380 from holding PKSHA TECHNOLOGY INC or generate 113.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. National Storage Affiliates
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| National Storage Aff |
PKSHA TECHNOLOGY and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and National Storage
The main advantage of trading using opposite PKSHA TECHNOLOGY and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, National Storage 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 National Storage will offset losses from the drop in National Storage's long position.| PKSHA TECHNOLOGY vs. Goodyear Tire Rubber | PKSHA TECHNOLOGY vs. Sumitomo Rubber Industries | PKSHA TECHNOLOGY vs. USWE SPORTS AB | PKSHA TECHNOLOGY vs. VULCAN MATERIALS |
| National Storage vs. 24SEVENOFFICE GROUP AB | National Storage vs. T MOBILE INCDL 00001 | National Storage vs. MTI WIRELESS EDGE | National Storage vs. Mobilezone Holding AG |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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