Correlation Between PKSHA TECHNOLOGY and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and SPARTAN STORES.
Diversification Opportunities for PKSHA TECHNOLOGY and SPARTAN STORES
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between PKSHA and SPARTAN is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and SPARTAN STORES go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and SPARTAN STORES
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.19 times more return on investment than SPARTAN STORES. However, PKSHA TECHNOLOGY is 1.19 times more volatile than SPARTAN STORES. It trades about -0.02 of its potential returns per unit of risk. SPARTAN STORES is currently generating about -0.08 per unit of risk. If you would invest 2,220 in PKSHA TECHNOLOGY INC on October 29, 2024 and sell it today you would lose (120.00) from holding PKSHA TECHNOLOGY INC or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. SPARTAN STORES
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| SPARTAN STORES |
PKSHA TECHNOLOGY and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and SPARTAN STORES
The main advantage of trading using opposite PKSHA TECHNOLOGY and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| PKSHA TECHNOLOGY vs. Rayonier Advanced Materials | PKSHA TECHNOLOGY vs. Westinghouse Air Brake | PKSHA TECHNOLOGY vs. Martin Marietta Materials | PKSHA TECHNOLOGY vs. Compagnie Plastic Omnium |
| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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