Correlation Between PKSHA TECHNOLOGY and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and USWE SPORTS 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 USWE SPORTS 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 USWE SPORTS AB, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and USWE SPORTS.
Diversification Opportunities for PKSHA TECHNOLOGY and USWE SPORTS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PKSHA and USWE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and USWE SPORTS go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and USWE SPORTS
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.31 times more return on investment than USWE SPORTS. However, PKSHA TECHNOLOGY is 1.31 times more volatile than USWE SPORTS AB. It trades about 0.29 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.25 per unit of risk. If you would invest 2,100 in PKSHA TECHNOLOGY INC on September 2, 2024 and sell it today you would earn a total of 500.00 from holding PKSHA TECHNOLOGY INC or generate 23.81% 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. USWE SPORTS AB
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| USWE SPORTS AB |
PKSHA TECHNOLOGY and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and USWE SPORTS
The main advantage of trading using opposite PKSHA TECHNOLOGY and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| PKSHA TECHNOLOGY vs. Microsoft | PKSHA TECHNOLOGY vs. Superior Plus Corp | PKSHA TECHNOLOGY vs. NMI Holdings | PKSHA TECHNOLOGY vs. Origin Agritech |
| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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