Correlation Between LightInTheBox Holding and Kidpik Corp
Can any of the company-specific risk be diversified away by investing in both LightInTheBox Holding 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 LightInTheBox Holding and Kidpik Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LightInTheBox Holding Co and Kidpik Corp, you can compare the effects of market volatilities on LightInTheBox Holding 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 LightInTheBox Holding with a short position of Kidpik Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LightInTheBox Holding and Kidpik Corp.
Diversification Opportunities for LightInTheBox Holding and Kidpik Corp
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between LightInTheBox and Kidpik is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding LightInTheBox Holding Co and Kidpik Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidpik Corp and LightInTheBox Holding 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 LightInTheBox Holding Co 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 LightInTheBox Holding i.e., LightInTheBox Holding and Kidpik Corp go up and down completely randomly.
Pair Corralation between LightInTheBox Holding and Kidpik Corp
Given the investment horizon of 90 days LightInTheBox Holding Co is expected to under-perform the Kidpik Corp. In addition to that, LightInTheBox Holding is 1.29 times more volatile than Kidpik Corp. It trades about -0.02 of its total potential returns per unit of risk. Kidpik Corp is currently generating about -0.01 per unit of volatility. If you would invest 315.00 in Kidpik Corp on August 24, 2024 and sell it today you would lose (92.00) from holding Kidpik Corp or give up 29.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LightInTheBox Holding Co vs. Kidpik Corp
Performance |
| Timeline |
| LightInTheBox Holding |
| Kidpik Corp |
LightInTheBox Holding and Kidpik Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LightInTheBox Holding and Kidpik Corp
The main advantage of trading using opposite LightInTheBox Holding and Kidpik Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LightInTheBox Holding 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.| LightInTheBox Holding vs. Qurate Retail Series | LightInTheBox Holding vs. Natural Health Trend | LightInTheBox Holding vs. Liquidity Services | LightInTheBox Holding vs. Qurate Retail |
| Kidpik Corp vs. Qurate Retail Series | Kidpik Corp vs. Natural Health Trend | Kidpik Corp vs. Liquidity Services | Kidpik Corp vs. Qurate Retail |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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