Correlation Between PKSHA TECHNOLOGY and China Datang
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and China Datang 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 China Datang 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 China Datang, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and China Datang 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 China Datang. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and China Datang.
Diversification Opportunities for PKSHA TECHNOLOGY and China Datang
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PKSHA and China is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and China Datang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Datang 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 China Datang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Datang has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and China Datang go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and China Datang
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.84 times more return on investment than China Datang. However, PKSHA TECHNOLOGY is 1.84 times more volatile than China Datang. It trades about 0.13 of its potential returns per unit of risk. China Datang is currently generating about 0.1 per unit of risk. If you would invest 2,240 in PKSHA TECHNOLOGY INC on September 13, 2024 and sell it today you would earn a total of 220.00 from holding PKSHA TECHNOLOGY INC or generate 9.82% 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. China Datang
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| China Datang |
PKSHA TECHNOLOGY and China Datang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and China Datang
The main advantage of trading using opposite PKSHA TECHNOLOGY and China Datang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, China Datang 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 China Datang will offset losses from the drop in China Datang's 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 |
| China Datang vs. FANDIFI TECHNOLOGY P | China Datang vs. Check Point Software | China Datang vs. Singapore Telecommunications Limited | China Datang vs. PKSHA TECHNOLOGY INC |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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