Correlation Between UmweltBank and PKSHA TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both UmweltBank 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 UmweltBank and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UmweltBank AG and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on UmweltBank 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 UmweltBank with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of UmweltBank and PKSHA TECHNOLOGY.
Diversification Opportunities for UmweltBank and PKSHA TECHNOLOGY
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UmweltBank and PKSHA is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding UmweltBank AG 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 UmweltBank 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 UmweltBank AG 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 UmweltBank i.e., UmweltBank and PKSHA TECHNOLOGY go up and down completely randomly.
Pair Corralation between UmweltBank and PKSHA TECHNOLOGY
Assuming the 90 days trading horizon UmweltBank AG is expected to generate 1.37 times more return on investment than PKSHA TECHNOLOGY. However, UmweltBank is 1.37 times more volatile than PKSHA TECHNOLOGY INC. It trades about -0.04 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about -0.14 per unit of risk. If you would invest 618.00 in UmweltBank AG on October 12, 2024 and sell it today you would lose (12.00) from holding UmweltBank AG or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UmweltBank AG vs. PKSHA TECHNOLOGY INC
Performance |
| Timeline |
| UmweltBank AG |
| PKSHA TECHNOLOGY INC |
UmweltBank and PKSHA TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UmweltBank and PKSHA TECHNOLOGY
The main advantage of trading using opposite UmweltBank and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UmweltBank 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.| UmweltBank vs. PKSHA TECHNOLOGY INC | UmweltBank vs. Minerals Technologies | UmweltBank vs. Sunny Optical Technology | UmweltBank vs. ASPEN TECHINC DL |
| PKSHA TECHNOLOGY vs. Virtu Financial | PKSHA TECHNOLOGY vs. Synovus Financial Corp | PKSHA TECHNOLOGY vs. Air Lease | PKSHA TECHNOLOGY vs. Cincinnati Financial Corp |
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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