Correlation Between Kidpik Corp and Hour Loop
Can any of the company-specific risk be diversified away by investing in both Kidpik Corp and Hour Loop 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 Hour Loop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kidpik Corp and Hour Loop, you can compare the effects of market volatilities on Kidpik Corp and Hour Loop 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 Hour Loop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kidpik Corp and Hour Loop.
Diversification Opportunities for Kidpik Corp and Hour Loop
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kidpik and Hour is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and Hour Loop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hour Loop 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 Hour Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hour Loop has no effect on the direction of Kidpik Corp i.e., Kidpik Corp and Hour Loop go up and down completely randomly.
Pair Corralation between Kidpik Corp and Hour Loop
Considering the 90-day investment horizon Kidpik Corp is expected to generate 1.77 times more return on investment than Hour Loop. However, Kidpik Corp is 1.77 times more volatile than Hour Loop. It trades about 0.02 of its potential returns per unit of risk. Hour Loop is currently generating about -0.01 per unit of risk. If you would invest 462.00 in Kidpik Corp on August 24, 2024 and sell it today you would lose (239.00) from holding Kidpik Corp or give up 51.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kidpik Corp vs. Hour Loop
Performance |
| Timeline |
| Kidpik Corp |
| Hour Loop |
Kidpik Corp and Hour Loop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kidpik Corp and Hour Loop
The main advantage of trading using opposite Kidpik Corp and Hour Loop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kidpik Corp position performs unexpectedly, Hour Loop 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 Hour Loop will offset losses from the drop in Hour Loop'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 |
| Hour Loop vs. Qurate Retail Series | Hour Loop vs. iPower Inc | Hour Loop vs. MOGU Inc | Hour Loop vs. Qurate Retail |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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