Correlation Between PKSHA TECHNOLOGY and X Fab

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

Diversification Opportunities for PKSHA TECHNOLOGY and X Fab

0.46

Correlation Coefficient

PKSHA TECHNOLOGY  X Fab

Very weak diversification

The 3 months correlation between PKSHA and XFB is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and X Fab go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and X Fab

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to generate 1.31 times more return on investment than X Fab. However, PKSHA TECHNOLOGY is 1.31 times more volatile than X Fab Silicon. It trades about -0.07 of its potential returns per unit of risk. X Fab Silicon is currently generating about -0.11 per unit of risk. If you would invest  2,320  in PKSHA TECHNOLOGY INC on December 28, 2024 and sell it today you would lose (430.00) from holding PKSHA TECHNOLOGY INC or give up 18.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

PKSHA TECHNOLOGY INC  vs.  X Fab Silicon

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 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.

X Fab Silicon

Risk-Adjusted Performance

Very Weak

Over the last 90 days X Fab Silicon has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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 X Fab

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

The idea behind PKSHA TECHNOLOGY INC and X Fab Silicon 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.