Correlation Between PKSHA TECHNOLOGY and Shimano

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

Diversification Opportunities for PKSHA TECHNOLOGY and Shimano

-0.27

Correlation Coefficient

PKSHA TECHNOLOGY  Shimano

Very good diversification

The 3 months correlation between PKSHA and Shimano is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Shimano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimano 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 Shimano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimano has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Shimano go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and Shimano

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 2.06 times more return on investment than Shimano. However, PKSHA TECHNOLOGY is 2.06 times more volatile than Shimano. It trades about 0.04 of its potential returns per unit of risk. Shimano is currently generating about -0.02 per unit of risk. If you would invest  1,260  in PKSHA TECHNOLOGY INC on October 24, 2024 and sell it today you would earn a total of  800.00  from holding PKSHA TECHNOLOGY INC or generate 63.49% 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.  Shimano

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Shimano

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shimano 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 Shimano

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

The idea behind PKSHA TECHNOLOGY INC and Shimano 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.