Correlation Between PKSHA TECHNOLOGY and Sterling Construction
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and Sterling Construction 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 Sterling Construction 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 Sterling Construction, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and Sterling Construction 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 Sterling Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and Sterling Construction.
Diversification Opportunities for PKSHA TECHNOLOGY and Sterling Construction
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PKSHA and Sterling is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Sterling Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Construction 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 Sterling Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Construction has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Sterling Construction go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and Sterling Construction
Assuming the 90 days horizon PKSHA TECHNOLOGY is expected to generate 1.67 times less return on investment than Sterling Construction. In addition to that, PKSHA TECHNOLOGY is 1.13 times more volatile than Sterling Construction. It trades about 0.05 of its total potential returns per unit of risk. Sterling Construction is currently generating about 0.09 per unit of volatility. If you would invest 3,560 in Sterling Construction on December 4, 2024 and sell it today you would earn a total of 7,905 from holding Sterling Construction or generate 222.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. Sterling Construction
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| Sterling Construction |
PKSHA TECHNOLOGY and Sterling Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and Sterling Construction
The main advantage of trading using opposite PKSHA TECHNOLOGY and Sterling Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, Sterling Construction 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 Sterling Construction will offset losses from the drop in Sterling Construction's long position.| PKSHA TECHNOLOGY vs. SENECA FOODS A | PKSHA TECHNOLOGY vs. Nomad Foods | PKSHA TECHNOLOGY vs. Jacquet Metal Service | PKSHA TECHNOLOGY vs. Zijin Mining Group |
| Sterling Construction vs. NTT DATA | Sterling Construction vs. SALESFORCE INC CDR | Sterling Construction vs. SIDETRADE EO 1 | Sterling Construction vs. Tradegate AG Wertpapierhandelsbank |
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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