Correlation Between PKSHA TECHNOLOGY and MICRONIC MYDATA
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and MICRONIC MYDATA 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 MICRONIC MYDATA 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 MICRONIC MYDATA, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and MICRONIC MYDATA 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 MICRONIC MYDATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and MICRONIC MYDATA.
Diversification Opportunities for PKSHA TECHNOLOGY and MICRONIC MYDATA
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PKSHA and MICRONIC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and MICRONIC MYDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRONIC MYDATA 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 MICRONIC MYDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICRONIC MYDATA has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and MICRONIC MYDATA go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and MICRONIC MYDATA
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.67 times more return on investment than MICRONIC MYDATA. However, PKSHA TECHNOLOGY is 1.67 times more volatile than MICRONIC MYDATA. It trades about 0.06 of its potential returns per unit of risk. MICRONIC MYDATA is currently generating about -0.01 per unit of risk. If you would invest 2,120 in PKSHA TECHNOLOGY INC on September 1, 2024 and sell it today you would earn a total of 480.00 from holding PKSHA TECHNOLOGY INC or generate 22.64% 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. MICRONIC MYDATA
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| MICRONIC MYDATA |
PKSHA TECHNOLOGY and MICRONIC MYDATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and MICRONIC MYDATA
The main advantage of trading using opposite PKSHA TECHNOLOGY and MICRONIC MYDATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, MICRONIC MYDATA 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 MICRONIC MYDATA will offset losses from the drop in MICRONIC MYDATA's long position.| PKSHA TECHNOLOGY vs. Liberty Broadband | PKSHA TECHNOLOGY vs. COMPUTERSHARE | PKSHA TECHNOLOGY vs. Internet Thailand PCL | PKSHA TECHNOLOGY vs. Cars Inc |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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