Correlation Between PAR Technology and Super Micro
Can any of the company-specific risk be diversified away by investing in both PAR Technology and Super Micro 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 PAR Technology and Super Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAR Technology and Super Micro Computer, you can compare the effects of market volatilities on PAR Technology and Super Micro 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 PAR Technology with a short position of Super Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAR Technology and Super Micro.
Diversification Opportunities for PAR Technology and Super Micro
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PAR and Super is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PAR Technology and Super Micro Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Micro Computer and PAR Technology 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 PAR Technology are associated (or correlated) with Super Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Micro Computer has no effect on the direction of PAR Technology i.e., PAR Technology and Super Micro go up and down completely randomly.
Pair Corralation between PAR Technology and Super Micro
Considering the 90-day investment horizon PAR Technology is expected to generate 0.29 times more return on investment than Super Micro. However, PAR Technology is 3.46 times less risky than Super Micro. It trades about 0.28 of its potential returns per unit of risk. Super Micro Computer is currently generating about 0.0 per unit of risk. If you would invest 5,192 in PAR Technology on August 31, 2024 and sell it today you would earn a total of 2,814 from holding PAR Technology or generate 54.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PAR Technology vs. Super Micro Computer
Performance |
| Timeline |
| PAR Technology |
| Super Micro Computer |
PAR Technology and Super Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAR Technology and Super Micro
The main advantage of trading using opposite PAR Technology and Super Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAR Technology position performs unexpectedly, Super Micro 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 Super Micro will offset losses from the drop in Super Micro's long position.| PAR Technology vs. CS Disco LLC | PAR Technology vs. PROS Holdings | PAR Technology vs. Meridianlink | PAR Technology vs. Enfusion |
| Super Micro vs. Dell Technologies | Super Micro vs. RLJ Lodging Trust | Super Micro vs. Aquagold International | Super Micro vs. Stepstone Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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