Correlation Between PSI Software and Corsair Gaming

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Can any of the company-specific risk be diversified away by investing in both PSI Software and Corsair Gaming 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 PSI Software and Corsair Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PSI Software AG and Corsair Gaming, you can compare the effects of market volatilities on PSI Software and Corsair Gaming 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 PSI Software with a short position of Corsair Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of PSI Software and Corsair Gaming.

Diversification Opportunities for PSI Software and Corsair Gaming

0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between PSI and Corsair is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PSI Software AG and Corsair Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corsair Gaming and PSI Software 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 PSI Software AG are associated (or correlated) with Corsair Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corsair Gaming has no effect on the direction of PSI Software i.e., PSI Software and Corsair Gaming go up and down completely randomly.

Pair Corralation between PSI Software and Corsair Gaming

Assuming the 90 days trading horizon PSI Software AG is expected to generate 0.73 times more return on investment than Corsair Gaming. However, PSI Software AG is 1.38 times less risky than Corsair Gaming. It trades about -0.05 of its potential returns per unit of risk. Corsair Gaming is currently generating about -0.07 per unit of risk. If you would invest  3,450  in PSI Software AG on August 31, 2024 and sell it today you would lose (1,270) from holding PSI Software AG or give up 36.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.74%
ValuesDaily Returns

PSI Software AG  vs.  Corsair Gaming

 Performance 
       Timeline  
PSI Software AG 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PSI Software AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, PSI Software is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Corsair Gaming 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

PSI Software and Corsair Gaming Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PSI Software and Corsair Gaming

The main advantage of trading using opposite PSI Software and Corsair Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSI Software position performs unexpectedly, Corsair Gaming 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 Corsair Gaming will offset losses from the drop in Corsair Gaming's long position.
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The idea behind PSI Software AG and Corsair Gaming pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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