Correlation Between PICKN PAY and Associated British
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and Associated British 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 Associated British 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 Associated British Foods, you can compare the effects of market volatilities on PICKN PAY and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Associated British.
Diversification Opportunities for PICKN PAY and Associated British
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PICKN and Associated is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of PICKN PAY i.e., PICKN PAY and Associated British go up and down completely randomly.
Pair Corralation between PICKN PAY and Associated British
Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the Associated British. But the stock apears to be less risky and, when comparing its historical volatility, PICKN PAY STORES is 1.05 times less risky than Associated British. The stock trades about -0.26 of its potential returns per unit of risk. The Associated British Foods is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,264 in Associated British Foods on December 8, 2024 and sell it today you would earn a total of 4.00 from holding Associated British Foods or generate 0.18% 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. Associated British Foods
Performance |
| Timeline |
| PICKN PAY STORES |
| Associated British Foods |
PICKN PAY and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and Associated British
The main advantage of trading using opposite PICKN PAY and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British's long position.| PICKN PAY vs. Q2M Managementberatung 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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