Correlation Between PKSHA TECHNOLOGY and British American
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and British American 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 British American 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 British American Tobacco, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and British American.
Diversification Opportunities for PKSHA TECHNOLOGY and British American
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PKSHA and British is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and British American go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and British American
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to under-perform the British American. In addition to that, PKSHA TECHNOLOGY is 3.12 times more volatile than British American Tobacco. It trades about -0.22 of its total potential returns per unit of risk. British American Tobacco is currently generating about 0.2 per unit of volatility. If you would invest 3,511 in British American Tobacco on October 7, 2024 and sell it today you would earn a total of 92.00 from holding British American Tobacco or generate 2.62% 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. British American Tobacco
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| British American Tobacco |
PKSHA TECHNOLOGY and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and British American
The main advantage of trading using opposite PKSHA TECHNOLOGY and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| PKSHA TECHNOLOGY vs. Microsoft | PKSHA TECHNOLOGY vs. CrowdStrike Holdings | PKSHA TECHNOLOGY vs. KASPIKZ 1 | PKSHA TECHNOLOGY vs. Superior Plus Corp |
| British American vs. Hollywood Bowl Group | British American vs. Tower One Wireless | British American vs. ATRESMEDIA | British American vs. Nexstar Media Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |