Correlation Between AOI Electronics and PKSHA TECHNOLOGY

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

By analyzing existing cross correlation between AOI Electronics Co and PKSHA TECHNOLOGY INC, you can compare the effects of market volatilities on AOI Electronics 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 AOI Electronics with a short position of PKSHA TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and PKSHA TECHNOLOGY.

Diversification Opportunities for AOI Electronics and PKSHA TECHNOLOGY

0.0

Correlation Coefficient

AOI Electronics  PKSHA TECHNOLOGY

Pay attention - limited upside

The 3 months correlation between AOI and PKSHA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co 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 AOI Electronics 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 AOI Electronics Co 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 AOI Electronics i.e., AOI Electronics and PKSHA TECHNOLOGY go up and down completely randomly.

Pair Corralation between AOI Electronics and PKSHA TECHNOLOGY

If you would invest  1,890  in PKSHA TECHNOLOGY INC on September 20, 2024 and sell it today you would earn a total of  490.00  from holding PKSHA TECHNOLOGY INC or generate 25.93% return on investment over 90 days.

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

AOI Electronics Co  vs.  PKSHA TECHNOLOGY INC

AOI Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

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

PKSHA TECHNOLOGY INC

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PKSHA TECHNOLOGY INC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PKSHA TECHNOLOGY reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AOI Electronics and PKSHA TECHNOLOGY

The main advantage of trading using opposite AOI Electronics and PKSHA TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics 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 AOI Electronics Co 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.