Correlation Between PAR Technology and Kubient

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

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

Diversification Opportunities for PAR Technology and Kubient

-0.43

Correlation Coefficient

PAR Technology  Kubient

Very good diversification

The 3 months correlation between PAR and Kubient is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PAR Technology and Kubient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kubient and PAR 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 PAR Technology are associated (or correlated) with Kubient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kubient has no effect on the direction of PAR Technology i.e., PAR Technology and Kubient go up and down completely randomly.

Pair Corralation between PAR Technology and Kubient

Considering the 90-day investment horizon PAR Technology is expected to generate 0.35 times more return on investment than Kubient. However, PAR Technology is 2.87 times less risky than Kubient. It trades about 0.09 of its potential returns per unit of risk. Kubient is currently generating about 0.02 per unit of risk. If you would invest  2,630  in PAR Technology on September 28, 2024 and sell it today you would earn a total of  4,698  from holding PAR Technology or generate 178.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	27.42%
Values	Daily Returns

PAR Technology  vs.  Kubient

PAR Technology

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PAR Technology are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, PAR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Kubient

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kubient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Kubient is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PAR Technology and Kubient

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

The idea behind PAR Technology and Kubient 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.