Correlation Between NEXANS and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both NEXANS 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 NEXANS and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEXANS and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on NEXANS 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 NEXANS with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEXANS and PKSHA TECHNOLOGY.
Diversification Opportunities for NEXANS and PKSHA TECHNOLOGY
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEXANS and PKSHA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NEXANS 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 NEXANS 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 NEXANS 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 NEXANS i.e., NEXANS and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between NEXANS and PKSHA TECHNOLOGY
Assuming the 90 days trading horizon NEXANS is expected to under-perform the PKSHA TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, NEXANS is 2.15 times less risky than PKSHA TECHNOLOGY. The stock trades about -0.15 of its potential returns per unit of risk. The PKSHA TECHNOLOGY INC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,140 in PKSHA TECHNOLOGY INC on September 19, 2024 and sell it today you would earn a total of 280.00 from holding PKSHA TECHNOLOGY INC or generate 13.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEXANS vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| NEXANS |
| PKSHA TECHNOLOGY INC |
NEXANS and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEXANS and PKSHA TECHNOLOGY
The main advantage of trading using opposite NEXANS and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEXANS 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.| NEXANS vs. Fidelity National Information | NEXANS vs. Science Applications International | NEXANS vs. National Storage Affiliates | NEXANS vs. PKSHA TECHNOLOGY INC |
| PKSHA TECHNOLOGY vs. Major Drilling Group | PKSHA TECHNOLOGY vs. DICKER DATA LTD | PKSHA TECHNOLOGY vs. NorAm Drilling AS | PKSHA TECHNOLOGY vs. Datang International Power |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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