Correlation Between PICKN PAY and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC, you can compare the effects of market volatilities on PICKN PAY and STORE ELECTRONIC 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 STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and STORE ELECTRONIC.
Diversification Opportunities for PICKN PAY and STORE ELECTRONIC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PICKN and STORE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC 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 STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of PICKN PAY i.e., PICKN PAY and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between PICKN PAY and STORE ELECTRONIC
Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the STORE ELECTRONIC. But the stock apears to be less risky and, when comparing its historical volatility, PICKN PAY STORES is 1.39 times less risky than STORE ELECTRONIC. The stock trades about -0.02 of its potential returns per unit of risk. The STORE ELECTRONIC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11,873 in STORE ELECTRONIC on November 5, 2024 and sell it today you would earn a total of 5,007 from holding STORE ELECTRONIC or generate 42.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. STORE ELECTRONIC
Performance |
| Timeline |
| PICKN PAY STORES |
| STORE ELECTRONIC |
PICKN PAY and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and STORE ELECTRONIC
The main advantage of trading using opposite PICKN PAY and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| PICKN PAY vs. Adtalem Global Education | PICKN PAY vs. Mitsubishi Materials | PICKN PAY vs. SANOK RUBBER ZY | PICKN PAY vs. Strategic Education |
| STORE ELECTRONIC vs. Titan Machinery | STORE ELECTRONIC vs. NORWEGIAN AIR SHUT | STORE ELECTRONIC vs. FORWARD AIR P | STORE ELECTRONIC vs. Westinghouse Air Brake |
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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