Correlation Between PICKN PAY and X FAB
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on PICKN PAY and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and X FAB.
Diversification Opportunities for PICKN PAY and X FAB
Very good diversification
The 3 months correlation between PICKN and XFB is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of PICKN PAY i.e., PICKN PAY and X FAB go up and down completely randomly.
Pair Corralation between PICKN PAY and X FAB
Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the X FAB. In addition to that, PICKN PAY is 1.38 times more volatile than X FAB Silicon Foundries. It trades about -0.03 of its total potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.02 per unit of volatility. If you would invest 672.00 in X FAB Silicon Foundries on September 4, 2024 and sell it today you would lose (233.00) from holding X FAB Silicon Foundries or give up 34.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. X FAB Silicon Foundries
Performance |
| Timeline |
| PICKN PAY STORES |
| X FAB Silicon |
PICKN PAY and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and X FAB
The main advantage of trading using opposite PICKN PAY and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.The idea behind PICKN PAY STORES and X FAB Silicon Foundries 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.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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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