Correlation Between PKSHA TECHNOLOGY and UNICREDIT SPA

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

Diversification Opportunities for PKSHA TECHNOLOGY and UNICREDIT SPA

-0.39

Correlation Coefficient

PKSHA TECHNOLOGY  UNICREDIT SPA

Very good diversification

The 3 months correlation between PKSHA and UNICREDIT is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and UNICREDIT SPA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNICREDIT SPA ADR 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 UNICREDIT SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNICREDIT SPA ADR has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and UNICREDIT SPA go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and UNICREDIT SPA

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.73 times more return on investment than UNICREDIT SPA. However, PKSHA TECHNOLOGY is 1.73 times more volatile than UNICREDIT SPA ADR. It trades about 0.1 of its potential returns per unit of risk. UNICREDIT SPA ADR is currently generating about 0.01 per unit of risk. If you would invest  2,020  in PKSHA TECHNOLOGY INC on October 7, 2024 and sell it today you would earn a total of  340.00  from holding PKSHA TECHNOLOGY INC or generate 16.83% return on investment over 90 days.

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

PKSHA TECHNOLOGY INC  vs.  UNICREDIT SPA ADR

PKSHA TECHNOLOGY INC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PKSHA TECHNOLOGY INC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PKSHA TECHNOLOGY reported solid returns over the last few months and may actually be approaching a breakup point.

UNICREDIT SPA ADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UNICREDIT SPA ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, UNICREDIT SPA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PKSHA TECHNOLOGY and UNICREDIT SPA

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

The idea behind PKSHA TECHNOLOGY INC and UNICREDIT SPA ADR 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.