Correlation Between PKSHA TECHNOLOGY and Comba Telecom

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

Diversification Opportunities for PKSHA TECHNOLOGY and Comba Telecom

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between PKSHA and Comba is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Comba Telecom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comba Telecom Systems 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 Comba Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comba Telecom Systems has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Comba Telecom go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and Comba Telecom

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to under-perform the Comba Telecom. But the stock apears to be less risky and, when comparing its historical volatility, PKSHA TECHNOLOGY INC is 1.62 times less risky than Comba Telecom. The stock trades about -0.4 of its potential returns per unit of risk. The Comba Telecom Systems is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  13.00  in Comba Telecom Systems on October 20, 2024 and sell it today you would lose (1.00) from holding Comba Telecom Systems or give up 7.69% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy94.44%
ValuesDaily Returns

PKSHA TECHNOLOGY INC  vs.  Comba Telecom Systems

 Performance 
       Timeline  
PKSHA TECHNOLOGY INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Comba Telecom Systems 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Comba Telecom Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Comba Telecom is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

PKSHA TECHNOLOGY and Comba Telecom Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PKSHA TECHNOLOGY and Comba Telecom

The main advantage of trading using opposite PKSHA TECHNOLOGY and Comba Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY position performs unexpectedly, Comba Telecom 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 Comba Telecom will offset losses from the drop in Comba Telecom's long position.
The idea behind PKSHA TECHNOLOGY INC and Comba Telecom Systems 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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