Correlation Between Kidpik Corp and Emerge Commerce
Can any of the company-specific risk be diversified away by investing in both Kidpik Corp and Emerge Commerce 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 Kidpik Corp and Emerge Commerce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kidpik Corp and Emerge Commerce, you can compare the effects of market volatilities on Kidpik Corp and Emerge Commerce 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 Kidpik Corp with a short position of Emerge Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kidpik Corp and Emerge Commerce.
Diversification Opportunities for Kidpik Corp and Emerge Commerce
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kidpik and Emerge is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and Emerge Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerge Commerce and Kidpik Corp 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 Kidpik Corp are associated (or correlated) with Emerge Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerge Commerce has no effect on the direction of Kidpik Corp i.e., Kidpik Corp and Emerge Commerce go up and down completely randomly.
Pair Corralation between Kidpik Corp and Emerge Commerce
Considering the 90-day investment horizon Kidpik Corp is expected to under-perform the Emerge Commerce. But the stock apears to be less risky and, when comparing its historical volatility, Kidpik Corp is 36.26 times less risky than Emerge Commerce. The stock trades about -0.03 of its potential returns per unit of risk. The Emerge Commerce is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Emerge Commerce on August 24, 2024 and sell it today you would earn a total of 0.01 from holding Emerge Commerce or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kidpik Corp vs. Emerge Commerce
Performance |
| Timeline |
| Kidpik Corp |
| Emerge Commerce |
Kidpik Corp and Emerge Commerce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kidpik Corp and Emerge Commerce
The main advantage of trading using opposite Kidpik Corp and Emerge Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kidpik Corp position performs unexpectedly, Emerge Commerce 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 Emerge Commerce will offset losses from the drop in Emerge Commerce's long position.| Kidpik Corp vs. Qurate Retail Series | Kidpik Corp vs. Natural Health Trend | Kidpik Corp vs. Liquidity Services | Kidpik Corp vs. Qurate Retail |
| Emerge Commerce vs. Phonex Inc | Emerge Commerce vs. Delivery Hero SE | Emerge Commerce vs. 1StdibsCom | Emerge Commerce vs. Natural Health Trend |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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