Correlation Between PKSHA TECHNOLOGY and Jenoptik

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

Diversification Opportunities for PKSHA TECHNOLOGY and Jenoptik

-0.64

Correlation Coefficient

PKSHA TECHNOLOGY  Jenoptik

Excellent diversification

The 3 months correlation between PKSHA and Jenoptik is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Jenoptik AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jenoptik AG 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 Jenoptik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jenoptik AG has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Jenoptik go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and Jenoptik

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.49 times more return on investment than Jenoptik. However, PKSHA TECHNOLOGY is 1.49 times more volatile than Jenoptik AG. It trades about 0.13 of its potential returns per unit of risk. Jenoptik AG is currently generating about -0.13 per unit of risk. If you would invest  1,930  in PKSHA TECHNOLOGY INC on September 15, 2024 and sell it today you would earn a total of  530.00  from holding PKSHA TECHNOLOGY INC or generate 27.46% return on investment over 90 days.

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

PKSHA TECHNOLOGY INC  vs.  Jenoptik AG

PKSHA TECHNOLOGY INC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PKSHA TECHNOLOGY INC are ranked lower than 9 (%) 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.

Jenoptik AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jenoptik AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PKSHA TECHNOLOGY and Jenoptik

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

The idea behind PKSHA TECHNOLOGY INC and Jenoptik AG 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.