Correlation Between FLOW TRADERS and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and PKSHA TECHNOLOGY.
Diversification Opportunities for FLOW TRADERS and PKSHA TECHNOLOGY
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between FLOW and PKSHA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD 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 FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between FLOW TRADERS and PKSHA TECHNOLOGY
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 1.05 times more return on investment than PKSHA TECHNOLOGY. However, FLOW TRADERS is 1.05 times more volatile than PKSHA TECHNOLOGY INC. It trades about 0.1 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about -0.33 per unit of risk. If you would invest 2,218 in FLOW TRADERS LTD on October 20, 2024 and sell it today you would earn a total of 76.00 from holding FLOW TRADERS LTD or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| FLOW TRADERS LTD |
| PKSHA TECHNOLOGY INC |
FLOW TRADERS and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and PKSHA TECHNOLOGY
The main advantage of trading using opposite FLOW TRADERS and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. TAL Education Group | FLOW TRADERS vs. PT Global Mediacom | FLOW TRADERS vs. STRAYER EDUCATION | FLOW TRADERS vs. CAREER EDUCATION |
| PKSHA TECHNOLOGY vs. Sumitomo Rubber Industries | PKSHA TECHNOLOGY vs. ADRIATIC METALS LS 013355 | PKSHA TECHNOLOGY vs. Martin Marietta Materials | PKSHA TECHNOLOGY vs. THRACE PLASTICS |
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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