Correlation Between PICKN PAY and THORNEY TECHS
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and THORNEY TECHS 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 THORNEY TECHS 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 THORNEY TECHS LTD, you can compare the effects of market volatilities on PICKN PAY and THORNEY TECHS 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 THORNEY TECHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and THORNEY TECHS.
Diversification Opportunities for PICKN PAY and THORNEY TECHS
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PICKN and THORNEY is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and THORNEY TECHS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THORNEY TECHS LTD 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 THORNEY TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THORNEY TECHS LTD has no effect on the direction of PICKN PAY i.e., PICKN PAY and THORNEY TECHS go up and down completely randomly.
Pair Corralation between PICKN PAY and THORNEY TECHS
Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the THORNEY TECHS. But the stock apears to be less risky and, when comparing its historical volatility, PICKN PAY STORES is 1.57 times less risky than THORNEY TECHS. The stock trades about -0.03 of its potential returns per unit of risk. The THORNEY TECHS LTD is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 21.00 in THORNEY TECHS LTD on October 11, 2024 and sell it today you would lose (13.70) from holding THORNEY TECHS LTD or give up 65.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
PICKN PAY STORES vs. THORNEY TECHS LTD
Performance |
| Timeline |
| PICKN PAY STORES |
| THORNEY TECHS LTD |
PICKN PAY and THORNEY TECHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and THORNEY TECHS
The main advantage of trading using opposite PICKN PAY and THORNEY TECHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, THORNEY TECHS 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 THORNEY TECHS will offset losses from the drop in THORNEY TECHS's long position.| PICKN PAY vs. Methode Electronics | PICKN PAY vs. Nanjing Panda Electronics | PICKN PAY vs. ELECTRONIC ARTS | PICKN PAY vs. Thai Beverage Public |
| THORNEY TECHS vs. Liberty Broadband | THORNEY TECHS vs. INTERNET INJPADR 1 | THORNEY TECHS vs. Nippon Light Metal | THORNEY TECHS vs. DAIDO METAL TD |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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