Correlation Between BRIT AMER and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both BRIT AMER 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 BRIT AMER and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRIT AMER TOBACCO and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on BRIT AMER 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 BRIT AMER with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and PKSHA TECHNOLOGY.
Diversification Opportunities for BRIT AMER and PKSHA TECHNOLOGY
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BRIT and PKSHA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO 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 BRIT AMER 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 BRIT AMER TOBACCO 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 BRIT AMER i.e., BRIT AMER and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between BRIT AMER and PKSHA TECHNOLOGY
Assuming the 90 days trading horizon BRIT AMER TOBACCO is expected to generate 0.53 times more return on investment than PKSHA TECHNOLOGY. However, BRIT AMER TOBACCO is 1.87 times less risky than PKSHA TECHNOLOGY. It trades about -0.03 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about -0.3 per unit of risk. If you would invest 3,493 in BRIT AMER TOBACCO on October 19, 2024 and sell it today you would lose (23.00) from holding BRIT AMER TOBACCO or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| PKSHA TECHNOLOGY INC |
BRIT AMER and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and PKSHA TECHNOLOGY
The main advantage of trading using opposite BRIT AMER and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER 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.| BRIT AMER vs. Guidewire Software | BRIT AMER vs. GBS Software AG | BRIT AMER vs. PSI Software AG | BRIT AMER vs. SPORT LISBOA E |
| PKSHA TECHNOLOGY vs. Computershare Limited | PKSHA TECHNOLOGY vs. ecotel communication ag | PKSHA TECHNOLOGY vs. Hemisphere Energy Corp | PKSHA TECHNOLOGY vs. BRIT AMER TOBACCO |
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 Stocks Directory module to find actively traded stocks across global markets.
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