Correlation Between PKSHA TECHNOLOGY and FATFISH GROUP

Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and FATFISH GROUP 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 PKSHA TECHNOLOGY and FATFISH GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and FATFISH GROUP LTD, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and FATFISH GROUP 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 PKSHA TECHNOLOGY with a short position of FATFISH GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and FATFISH GROUP.

Diversification Opportunities for PKSHA TECHNOLOGY and FATFISH GROUP

-0.14

Correlation Coefficient

PKSHA TECHNOLOGY  FATFISH GROUP

Good diversification

The 3 months correlation between PKSHA and FATFISH is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and FATFISH GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FATFISH GROUP LTD and PKSHA 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 PKSHA TECHNOLOGY INC are associated (or correlated) with FATFISH GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FATFISH GROUP LTD has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and FATFISH GROUP go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and FATFISH GROUP

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 0.51 times more return on investment than FATFISH GROUP. However, PKSHA TECHNOLOGY INC is 1.96 times less risky than FATFISH GROUP. It trades about -0.04 of its potential returns per unit of risk. FATFISH GROUP LTD is currently generating about -0.08 per unit of risk. If you would invest  2,320  in PKSHA TECHNOLOGY INC on December 3, 2024 and sell it today you would lose (220.00) from holding PKSHA TECHNOLOGY INC or give up 9.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PKSHA TECHNOLOGY INC  vs.  FATFISH GROUP LTD

PKSHA TECHNOLOGY INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days PKSHA TECHNOLOGY INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

FATFISH GROUP LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days FATFISH GROUP LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PKSHA TECHNOLOGY and FATFISH GROUP

The main advantage of trading using opposite PKSHA TECHNOLOGY and FATFISH GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, FATFISH GROUP 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 FATFISH GROUP will offset losses from the drop in FATFISH GROUP's long position.

The idea behind PKSHA TECHNOLOGY INC and FATFISH GROUP LTD 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.