Correlation Between KonaTel and Pegasus Tel

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

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

Diversification Opportunities for KonaTel and Pegasus Tel

0.05

Correlation Coefficient

KonaTel  Pegasus Tel

Significant diversification

The 3 months correlation between KonaTel and Pegasus is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding KonaTel and Pegasus Tel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasus Tel and KonaTel 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 KonaTel are associated (or correlated) with Pegasus Tel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasus Tel has no effect on the direction of KonaTel i.e., KonaTel and Pegasus Tel go up and down completely randomly.

Pair Corralation between KonaTel and Pegasus Tel

Given the investment horizon of 90 days KonaTel is expected to under-perform the Pegasus Tel. But the otc stock apears to be less risky and, when comparing its historical volatility, KonaTel is 2.23 times less risky than Pegasus Tel. The otc stock trades about -0.05 of its potential returns per unit of risk. The Pegasus Tel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.05  in Pegasus Tel on October 2, 2024 and sell it today you would earn a total of  0.09  from holding Pegasus Tel or generate 180.0% return on investment over 90 days.

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

KonaTel  vs.  Pegasus Tel

KonaTel

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KonaTel has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pegasus Tel

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pegasus Tel are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile technical and fundamental indicators, Pegasus Tel disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KonaTel and Pegasus Tel

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

The idea behind KonaTel and Pegasus Tel 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.