Correlation Between PKSHA TECHNOLOGY and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and THRACE PLASTICS 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 THRACE PLASTICS 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 THRACE PLASTICS, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and THRACE PLASTICS.
Diversification Opportunities for PKSHA TECHNOLOGY and THRACE PLASTICS
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PKSHA and THRACE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and THRACE PLASTICS
Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 2.33 times more return on investment than THRACE PLASTICS. However, PKSHA TECHNOLOGY is 2.33 times more volatile than THRACE PLASTICS. It trades about 0.11 of its potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.14 per unit of risk. If you would invest 2,140 in PKSHA TECHNOLOGY INC on September 13, 2024 and sell it today you would earn a total of 320.00 from holding PKSHA TECHNOLOGY INC or generate 14.95% 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. THRACE PLASTICS
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| THRACE PLASTICS |
PKSHA TECHNOLOGY and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and THRACE PLASTICS
The main advantage of trading using opposite PKSHA TECHNOLOGY and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS'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 |
| THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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