Correlation Between PKSHA TECHNOLOGY and Gold Road
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and Gold Road 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 Gold Road 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 Gold Road Resources, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and Gold Road.
Diversification Opportunities for PKSHA TECHNOLOGY and Gold Road
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PKSHA and Gold is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Gold Road go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and Gold Road
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to under-perform the Gold Road. In addition to that, PKSHA TECHNOLOGY is 1.42 times more volatile than Gold Road Resources. It trades about -0.04 of its total potential returns per unit of risk. Gold Road Resources is currently generating about 0.04 per unit of volatility. If you would invest 95.00 in Gold Road Resources on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Gold Road Resources or generate 17.89% 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. Gold Road Resources
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| Gold Road Resources |
PKSHA TECHNOLOGY and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and Gold Road
The main advantage of trading using opposite PKSHA TECHNOLOGY and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| PKSHA TECHNOLOGY vs. Liberty Broadband | PKSHA TECHNOLOGY vs. COMPUTERSHARE | PKSHA TECHNOLOGY vs. Internet Thailand PCL | PKSHA TECHNOLOGY vs. Cars Inc |
| Gold Road vs. Charter Communications | Gold Road vs. RYU Apparel | Gold Road vs. Singapore Telecommunications Limited | Gold Road vs. Entravision Communications |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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