Correlation Between Addtech AB and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Addtech AB 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 Addtech AB and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on Addtech AB 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 Addtech AB with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and PKSHA TECHNOLOGY.
Diversification Opportunities for Addtech AB and PKSHA TECHNOLOGY
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addtech and PKSHA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB 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 Addtech AB 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 Addtech AB 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 Addtech AB i.e., Addtech AB and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between Addtech AB and PKSHA TECHNOLOGY
Assuming the 90 days trading horizon Addtech AB is expected to generate 0.44 times more return on investment than PKSHA TECHNOLOGY. However, Addtech AB is 2.27 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 -0.22 per unit of risk. If you would invest 2,698 in Addtech AB on October 10, 2024 and sell it today you would lose (44.00) from holding Addtech AB or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| Addtech AB |
| PKSHA TECHNOLOGY INC |
Addtech AB and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and PKSHA TECHNOLOGY
The main advantage of trading using opposite Addtech AB and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB 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.| Addtech AB vs. GameStop Corp | Addtech AB vs. Marie Brizard Wine | Addtech AB vs. PENN NATL GAMING | Addtech AB vs. OURGAME INTHOLDL 00005 |
| PKSHA TECHNOLOGY vs. PEPTONIC MEDICAL | PKSHA TECHNOLOGY vs. Sumitomo Mitsui Construction | PKSHA TECHNOLOGY vs. MeVis Medical Solutions | PKSHA TECHNOLOGY vs. Merit Medical Systems |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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