Correlation Between Dada Nexus and Kidpik Corp
Can any of the company-specific risk be diversified away by investing in both Dada Nexus and Kidpik Corp 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 Dada Nexus and Kidpik Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dada Nexus and Kidpik Corp, you can compare the effects of market volatilities on Dada Nexus and Kidpik Corp 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 Dada Nexus with a short position of Kidpik Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dada Nexus and Kidpik Corp.
Diversification Opportunities for Dada Nexus and Kidpik Corp
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dada and Kidpik is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dada Nexus and Kidpik Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidpik Corp and Dada Nexus 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 Dada Nexus are associated (or correlated) with Kidpik Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kidpik Corp has no effect on the direction of Dada Nexus i.e., Dada Nexus and Kidpik Corp go up and down completely randomly.
Pair Corralation between Dada Nexus and Kidpik Corp
Given the investment horizon of 90 days Dada Nexus is expected to under-perform the Kidpik Corp. But the stock apears to be less risky and, when comparing its historical volatility, Dada Nexus is 1.3 times less risky than Kidpik Corp. The stock trades about -0.16 of its potential returns per unit of risk. The Kidpik Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 236.00 in Kidpik Corp on August 31, 2024 and sell it today you would lose (14.00) from holding Kidpik Corp or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dada Nexus vs. Kidpik Corp
Performance |
| Timeline |
| Dada Nexus |
| Kidpik Corp |
Dada Nexus and Kidpik Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dada Nexus and Kidpik Corp
The main advantage of trading using opposite Dada Nexus and Kidpik Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dada Nexus position performs unexpectedly, Kidpik Corp 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 Kidpik Corp will offset losses from the drop in Kidpik Corp's long position.| Dada Nexus vs. Vipshop Holdings Limited | Dada Nexus vs. JD Inc Adr | Dada Nexus vs. PDD Holdings | Dada Nexus vs. Jumia Technologies AG |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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