Correlation Between PKSHA TECHNOLOGY and Apollo Medical

Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY and Apollo Medical 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 Apollo Medical 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 Apollo Medical Holdings, you can compare the effects of market volatilities on PKSHA TECHNOLOGY and Apollo Medical 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 Apollo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and Apollo Medical.

Diversification Opportunities for PKSHA TECHNOLOGY and Apollo Medical

0.36

Correlation Coefficient

PKSHA TECHNOLOGY  Apollo Medical

Weak diversification

The 3 months correlation between PKSHA and Apollo is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Apollo Medical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Medical Holdings 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 Apollo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Medical Holdings has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Apollo Medical go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and Apollo Medical

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to under-perform the Apollo Medical. But the stock apears to be less risky and, when comparing its historical volatility, PKSHA TECHNOLOGY INC is 1.81 times less risky than Apollo Medical. The stock trades about -0.34 of its potential returns per unit of risk. The Apollo Medical Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3,200  in Apollo Medical Holdings on October 23, 2024 and sell it today you would earn a total of  200.00  from holding Apollo Medical Holdings or generate 6.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.12%
Values	Daily Returns

PKSHA TECHNOLOGY INC  vs.  Apollo Medical Holdings

PKSHA TECHNOLOGY INC

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, PKSHA TECHNOLOGY is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Apollo Medical Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with PKSHA TECHNOLOGY and Apollo Medical

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

The idea behind PKSHA TECHNOLOGY INC and Apollo Medical Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.