Correlation Between PKSHA TECHNOLOGY and Berkshire Hills
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and Berkshire Hills 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 Berkshire Hills 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 Berkshire Hills Bancorp, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and Berkshire Hills 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 Berkshire Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and Berkshire Hills.
Diversification Opportunities for PKSHA TECHNOLOGY and Berkshire Hills
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PKSHA and Berkshire is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Berkshire Hills Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hills Bancorp 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 Berkshire Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hills Bancorp has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Berkshire Hills go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and Berkshire Hills
Assuming the 90 days horizon PKSHA TECHNOLOGY is expected to generate 1.7 times less return on investment than Berkshire Hills. In addition to that, PKSHA TECHNOLOGY is 1.25 times more volatile than Berkshire Hills Bancorp. It trades about 0.06 of its total potential returns per unit of risk. Berkshire Hills Bancorp is currently generating about 0.13 per unit of volatility. If you would invest 1,904 in Berkshire Hills Bancorp on September 13, 2024 and sell it today you would earn a total of 1,016 from holding Berkshire Hills Bancorp or generate 53.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.22% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. Berkshire Hills Bancorp
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| Berkshire Hills Bancorp |
PKSHA TECHNOLOGY and Berkshire Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and Berkshire Hills
The main advantage of trading using opposite PKSHA TECHNOLOGY and Berkshire Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, Berkshire Hills 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 Berkshire Hills will offset losses from the drop in Berkshire Hills' long position.| PKSHA TECHNOLOGY vs. Adyen NV | PKSHA TECHNOLOGY vs. Superior Plus Corp | PKSHA TECHNOLOGY vs. SIVERS SEMICONDUCTORS AB | PKSHA TECHNOLOGY vs. Norsk Hydro ASA |
| Berkshire Hills vs. AEGEAN AIRLINES | Berkshire Hills vs. Vulcan Materials | Berkshire Hills vs. Singapore Airlines Limited | Berkshire Hills vs. GOODYEAR T RUBBER |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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