Correlation Between PKSHA TECHNOLOGY and SYSTEMAIR
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and SYSTEMAIR 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 SYSTEMAIR 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 SYSTEMAIR AB, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and SYSTEMAIR 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 SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and SYSTEMAIR.
Diversification Opportunities for PKSHA TECHNOLOGY and SYSTEMAIR
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PKSHA and SYSTEMAIR is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB 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 SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and SYSTEMAIR go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and SYSTEMAIR
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.95 times more return on investment than SYSTEMAIR. However, PKSHA TECHNOLOGY is 1.95 times more volatile than SYSTEMAIR AB. It trades about 0.14 of its potential returns per unit of risk. SYSTEMAIR AB is currently generating about 0.12 per unit of risk. If you would invest 1,950 in PKSHA TECHNOLOGY INC on September 2, 2024 and sell it today you would earn a total of 650.00 from holding PKSHA TECHNOLOGY INC or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. SYSTEMAIR AB
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| SYSTEMAIR AB |
PKSHA TECHNOLOGY and SYSTEMAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and SYSTEMAIR
The main advantage of trading using opposite PKSHA TECHNOLOGY and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, SYSTEMAIR 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 SYSTEMAIR will offset losses from the drop in SYSTEMAIR's long position.| PKSHA TECHNOLOGY vs. Microsoft | PKSHA TECHNOLOGY vs. Superior Plus Corp | PKSHA TECHNOLOGY vs. NMI Holdings | PKSHA TECHNOLOGY vs. Origin Agritech |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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