Correlation Between AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY 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 AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY 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 AAC TECHNOLOGHLDGADR with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AAC and PKSHA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKSHA TECHNOLOGY INC and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with PKSHA TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKSHA TECHNOLOGY INC has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 0.89 times more return on investment than PKSHA TECHNOLOGY. However, AAC TECHNOLOGHLDGADR is 1.13 times less risky than PKSHA TECHNOLOGY. It trades about 0.08 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about 0.04 per unit of risk. If you would invest 183.00 in AAC TECHNOLOGHLDGADR on September 1, 2024 and sell it today you would earn a total of 223.00 from holding AAC TECHNOLOGHLDGADR or generate 121.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| PKSHA TECHNOLOGY INC |
AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY will offset losses from the drop in PKSHA TECHNOLOGY's long position.| AAC TECHNOLOGHLDGADR vs. Motorola Solutions | AAC TECHNOLOGHLDGADR vs. Nokia | AAC TECHNOLOGHLDGADR vs. ZTE Corporation | AAC TECHNOLOGHLDGADR vs. Hewlett Packard Enterprise |
| PKSHA TECHNOLOGY vs. Liberty Broadband | PKSHA TECHNOLOGY vs. COMPUTERSHARE | PKSHA TECHNOLOGY vs. Internet Thailand PCL | PKSHA TECHNOLOGY vs. Cars 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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