Correlation Between PKSHA TECHNOLOGY and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and REGAL ASIAN 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 REGAL ASIAN 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 REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and REGAL ASIAN 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 REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and REGAL ASIAN.
Diversification Opportunities for PKSHA TECHNOLOGY and REGAL ASIAN
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PKSHA and REGAL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS 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 REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and REGAL ASIAN go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and REGAL ASIAN
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 2.54 times more return on investment than REGAL ASIAN. However, PKSHA TECHNOLOGY is 2.54 times more volatile than REGAL ASIAN INVESTMENTS. It trades about 0.04 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.03 per unit of risk. If you would invest 1,780 in PKSHA TECHNOLOGY INC on September 1, 2024 and sell it today you would earn a total of 660.00 from holding PKSHA TECHNOLOGY INC or generate 37.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| REGAL ASIAN INVESTMENTS |
PKSHA TECHNOLOGY and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and REGAL ASIAN
The main advantage of trading using opposite PKSHA TECHNOLOGY and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.| PKSHA TECHNOLOGY vs. Liberty Broadband | PKSHA TECHNOLOGY vs. COMPUTERSHARE | PKSHA TECHNOLOGY vs. Internet Thailand PCL | PKSHA TECHNOLOGY vs. Cars Inc |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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