Correlation Between PICKN PAY and Jumbo SA
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and Jumbo SA 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 PICKN PAY and Jumbo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and Jumbo SA, you can compare the effects of market volatilities on PICKN PAY and Jumbo SA 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 PICKN PAY with a short position of Jumbo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Jumbo SA.
Diversification Opportunities for PICKN PAY and Jumbo SA
Very weak diversification
The 3 months correlation between PICKN and Jumbo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and Jumbo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jumbo SA and PICKN PAY 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 PICKN PAY STORES are associated (or correlated) with Jumbo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jumbo SA has no effect on the direction of PICKN PAY i.e., PICKN PAY and Jumbo SA go up and down completely randomly.
Pair Corralation between PICKN PAY and Jumbo SA
Assuming the 90 days trading horizon PICKN PAY STORES is expected to generate 1.04 times more return on investment than Jumbo SA. However, PICKN PAY is 1.04 times more volatile than Jumbo SA. It trades about 0.43 of its potential returns per unit of risk. Jumbo SA is currently generating about 0.08 per unit of risk. If you would invest 127.00 in PICKN PAY STORES on September 12, 2024 and sell it today you would earn a total of 30.00 from holding PICKN PAY STORES or generate 23.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. Jumbo SA
Performance |
| Timeline |
| PICKN PAY STORES |
| Jumbo SA |
PICKN PAY and Jumbo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and Jumbo SA
The main advantage of trading using opposite PICKN PAY and Jumbo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, Jumbo SA 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 Jumbo SA will offset losses from the drop in Jumbo SA's long position.The idea behind PICKN PAY STORES and Jumbo SA 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.| Jumbo SA vs. ePlay Digital | Jumbo SA vs. NAKED WINES PLC | Jumbo SA vs. THAI BEVERAGE | Jumbo SA vs. United Natural Foods |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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