Correlation Between PICKN PAY and RENTOKIL INITIAL
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and RENTOKIL INITIAL 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 RENTOKIL INITIAL 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 RENTOKIL INITIAL ADR5, you can compare the effects of market volatilities on PICKN PAY and RENTOKIL INITIAL 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 RENTOKIL INITIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and RENTOKIL INITIAL.
Diversification Opportunities for PICKN PAY and RENTOKIL INITIAL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PICKN and RENTOKIL is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and RENTOKIL INITIAL ADR5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENTOKIL INITIAL ADR5 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 RENTOKIL INITIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENTOKIL INITIAL ADR5 has no effect on the direction of PICKN PAY i.e., PICKN PAY and RENTOKIL INITIAL go up and down completely randomly.
Pair Corralation between PICKN PAY and RENTOKIL INITIAL
Assuming the 90 days trading horizon PICKN PAY STORES is expected to generate 0.75 times more return on investment than RENTOKIL INITIAL. However, PICKN PAY STORES is 1.33 times less risky than RENTOKIL INITIAL. It trades about 0.09 of its potential returns per unit of risk. RENTOKIL INITIAL ADR5 is currently generating about 0.01 per unit of risk. If you would invest 114.00 in PICKN PAY STORES on October 26, 2024 and sell it today you would earn a total of 34.00 from holding PICKN PAY STORES or generate 29.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
PICKN PAY STORES vs. RENTOKIL INITIAL ADR5
Performance |
| Timeline |
| PICKN PAY STORES |
| RENTOKIL INITIAL ADR5 |
PICKN PAY and RENTOKIL INITIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and RENTOKIL INITIAL
The main advantage of trading using opposite PICKN PAY and RENTOKIL INITIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, RENTOKIL INITIAL 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 RENTOKIL INITIAL will offset losses from the drop in RENTOKIL INITIAL's long position.| PICKN PAY vs. China Eastern Airlines | PICKN PAY vs. Micron Technology | PICKN PAY vs. JAPAN AIRLINES | PICKN PAY vs. Firan Technology Group |
| RENTOKIL INITIAL vs. PICKN PAY STORES | RENTOKIL INITIAL vs. ecotel communication ag | RENTOKIL INITIAL vs. Highlight Communications AG | RENTOKIL INITIAL vs. Chunghwa Telecom Co |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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