Correlation Between Addtech AB and PKSHA TECHNOLOGY

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Can any of the company-specific risk be diversified away by investing in both Addtech AB and PKSHA TECHNOLOGY 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 Addtech AB and PKSHA TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on Addtech AB and PKSHA TECHNOLOGY 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 Addtech AB with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and PKSHA TECHNOLOGY.

Diversification Opportunities for Addtech AB and PKSHA TECHNOLOGY

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Addtech and PKSHA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and PKSHA TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PKSHA TECHNOLOGY INC and Addtech AB 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 Addtech AB are associated (or correlated) with PKSHA TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PKSHA TECHNOLOGY INC has no effect on the direction of Addtech AB i.e., Addtech AB and PKSHA TECHNOLOGY go up and down completely randomly.

Pair Corralation between Addtech AB and PKSHA TECHNOLOGY

Assuming the 90 days trading horizon Addtech AB is expected to generate 0.53 times more return on investment than PKSHA TECHNOLOGY. However, Addtech AB is 1.89 times less risky than PKSHA TECHNOLOGY. It trades about 0.09 of its potential returns per unit of risk. PKSHA TECHNOLOGY INC is currently generating about 0.03 per unit of risk. If you would invest  1,698  in Addtech AB on October 9, 2024 and sell it today you would earn a total of  940.00  from holding Addtech AB or generate 55.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Addtech AB  vs.  PKSHA TECHNOLOGY INC

 Performance 
       Timeline  
Addtech AB 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Addtech AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Addtech AB is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
PKSHA TECHNOLOGY INC 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PKSHA TECHNOLOGY INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, PKSHA TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Addtech AB and PKSHA TECHNOLOGY Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Addtech AB and PKSHA TECHNOLOGY

The main advantage of trading using opposite Addtech AB and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY will offset losses from the drop in PKSHA TECHNOLOGY's long position.
The idea behind Addtech AB and PKSHA TECHNOLOGY INC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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