Correlation Between PICKN PAY and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and DATANG INTL 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 DATANG INTL 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 DATANG INTL POW, you can compare the effects of market volatilities on PICKN PAY and DATANG INTL 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 DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and DATANG INTL.
Diversification Opportunities for PICKN PAY and DATANG INTL
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PICKN and DATANG is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW 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 DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of PICKN PAY i.e., PICKN PAY and DATANG INTL go up and down completely randomly.
Pair Corralation between PICKN PAY and DATANG INTL
Assuming the 90 days trading horizon PICKN PAY STORES is expected to generate 0.88 times more return on investment than DATANG INTL. However, PICKN PAY STORES is 1.14 times less risky than DATANG INTL. It trades about 0.31 of its potential returns per unit of risk. DATANG INTL POW is currently generating about -0.08 per unit of risk. If you would invest 131.00 in PICKN PAY STORES on September 4, 2024 and sell it today you would earn a total of 23.00 from holding PICKN PAY STORES or generate 17.56% 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. DATANG INTL POW
Performance |
| Timeline |
| PICKN PAY STORES |
| DATANG INTL POW |
PICKN PAY and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and DATANG INTL
The main advantage of trading using opposite PICKN PAY and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL's long position.The idea behind PICKN PAY STORES and DATANG INTL POW 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.| DATANG INTL vs. Cogent Communications Holdings | DATANG INTL vs. Charter Communications | DATANG INTL vs. WillScot Mobile Mini | DATANG INTL vs. FUYO GENERAL LEASE |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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