Correlation Between PKSHA TECHNOLOGY and Sempra

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

Diversification Opportunities for PKSHA TECHNOLOGY and Sempra

0.59

Correlation Coefficient

PKSHA TECHNOLOGY  Sempra

Very weak diversification

The 3 months correlation between PKSHA and Sempra is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Sempra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempra 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 Sempra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sempra has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Sempra go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and Sempra

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.08 times more return on investment than Sempra. However, PKSHA TECHNOLOGY is 1.08 times more volatile than Sempra. It trades about -0.03 of its potential returns per unit of risk. Sempra is currently generating about -0.1 per unit of risk. If you would invest  2,300  in PKSHA TECHNOLOGY INC on December 20, 2024 and sell it today you would lose (240.00) from holding PKSHA TECHNOLOGY INC or give up 10.43% of portfolio value over 90 days.

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

PKSHA TECHNOLOGY INC  vs.  Sempra

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 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.

Sempra

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sempra has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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 Sempra

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

The idea behind PKSHA TECHNOLOGY INC and Sempra 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.