Correlation Between PKSHA TECHNOLOGY and NEXANS
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and NEXANS 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 NEXANS 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 NEXANS, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and NEXANS 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 NEXANS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and NEXANS.
Diversification Opportunities for PKSHA TECHNOLOGY and NEXANS
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PKSHA and NEXANS is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and NEXANS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXANS 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 NEXANS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXANS has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and NEXANS go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and NEXANS
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 2.15 times more return on investment than NEXANS. However, PKSHA TECHNOLOGY is 2.15 times more volatile than NEXANS. It trades about 0.17 of its potential returns per unit of risk. NEXANS is currently generating about -0.15 per unit of risk. If you would invest 2,140 in PKSHA TECHNOLOGY INC on September 19, 2024 and sell it today you would earn a total of 280.00 from holding PKSHA TECHNOLOGY INC or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. NEXANS
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| NEXANS |
PKSHA TECHNOLOGY and NEXANS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and NEXANS
The main advantage of trading using opposite PKSHA TECHNOLOGY and NEXANS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, NEXANS 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 NEXANS will offset losses from the drop in NEXANS's long position.| PKSHA TECHNOLOGY vs. Major Drilling Group | PKSHA TECHNOLOGY vs. DICKER DATA LTD | PKSHA TECHNOLOGY vs. NorAm Drilling AS | PKSHA TECHNOLOGY vs. Datang International Power |
| NEXANS vs. Fidelity National Information | NEXANS vs. Science Applications International | NEXANS vs. National Storage Affiliates | NEXANS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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