Correlation Between AIR PRODCHEMICALS and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and PKSHA TECHNOLOGY.
Diversification Opportunities for AIR PRODCHEMICALS and PKSHA TECHNOLOGY
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AIR and PKSHA is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and PKSHA TECHNOLOGY
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to under-perform the PKSHA TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, AIR PRODCHEMICALS is 2.99 times less risky than PKSHA TECHNOLOGY. The stock trades about -0.52 of its potential returns per unit of risk. The PKSHA TECHNOLOGY INC is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 2,460 in PKSHA TECHNOLOGY INC on October 13, 2024 and sell it today you would lose (140.00) from holding PKSHA TECHNOLOGY INC or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| PKSHA TECHNOLOGY INC |
AIR PRODCHEMICALS and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and PKSHA TECHNOLOGY
The main advantage of trading using opposite AIR PRODCHEMICALS and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. TRADELINK ELECTRON | AIR PRODCHEMICALS vs. Addtech AB | AIR PRODCHEMICALS vs. FLOW TRADERS LTD | AIR PRODCHEMICALS vs. VELA TECHNOLPLC LS 0001 |
| PKSHA TECHNOLOGY vs. Virtu Financial | PKSHA TECHNOLOGY vs. Synovus Financial Corp | PKSHA TECHNOLOGY vs. Air Lease | PKSHA TECHNOLOGY vs. Cincinnati Financial Corp |
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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