Correlation Between Posiflex Technology and K Way

Can any of the company-specific risk be diversified away by investing in both Posiflex Technology and K Way 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 Posiflex Technology and K Way into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Posiflex Technology and K Way Information, you can compare the effects of market volatilities on Posiflex Technology and K Way 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 Posiflex Technology with a short position of K Way. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posiflex Technology and K Way.

Diversification Opportunities for Posiflex Technology and K Way

-0.82

Correlation Coefficient

Posiflex Technology  K Way

Pay attention - limited upside

The 3 months correlation between Posiflex and 5201 is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Posiflex Technology and K Way Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Way Information and Posiflex 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 Posiflex Technology are associated (or correlated) with K Way. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Way Information has no effect on the direction of Posiflex Technology i.e., Posiflex Technology and K Way go up and down completely randomly.

Pair Corralation between Posiflex Technology and K Way

Assuming the 90 days trading horizon Posiflex Technology is expected to under-perform the K Way. In addition to that, Posiflex Technology is 1.38 times more volatile than K Way Information. It trades about -0.08 of its total potential returns per unit of risk. K Way Information is currently generating about 0.23 per unit of volatility. If you would invest  2,810  in K Way Information on December 24, 2024 and sell it today you would earn a total of  995.00  from holding K Way Information or generate 35.41% return on investment over 90 days.

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

Posiflex Technology  vs.  K Way Information

Posiflex Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Posiflex Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

K Way Information

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in K Way Information are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, K Way showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Posiflex Technology and K Way

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

The idea behind Posiflex Technology and K Way Information 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .