Correlation Between Kidpik Corp and Liquidity Services
Can any of the company-specific risk be diversified away by investing in both Kidpik Corp and Liquidity Services 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 Liquidity Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kidpik Corp and Liquidity Services, you can compare the effects of market volatilities on Kidpik Corp and Liquidity Services 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 Liquidity Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kidpik Corp and Liquidity Services.
Diversification Opportunities for Kidpik Corp and Liquidity Services
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kidpik and Liquidity is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and Liquidity Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liquidity Services 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 Liquidity Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liquidity Services has no effect on the direction of Kidpik Corp i.e., Kidpik Corp and Liquidity Services go up and down completely randomly.
Pair Corralation between Kidpik Corp and Liquidity Services
Considering the 90-day investment horizon Kidpik Corp is expected to generate 4.07 times more return on investment than Liquidity Services. However, Kidpik Corp is 4.07 times more volatile than Liquidity Services. It trades about 0.02 of its potential returns per unit of risk. Liquidity Services is currently generating about 0.06 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kidpik Corp vs. Liquidity Services
Performance |
| Timeline |
| Kidpik Corp |
| Liquidity Services |
Kidpik Corp and Liquidity Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kidpik Corp and Liquidity Services
The main advantage of trading using opposite Kidpik Corp and Liquidity Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kidpik Corp position performs unexpectedly, Liquidity Services 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 Liquidity Services will offset losses from the drop in Liquidity Services' long position.| Kidpik Corp vs. Qurate Retail Series | Kidpik Corp vs. Natural Health Trend | Kidpik Corp vs. Liquidity Services | Kidpik Corp vs. Qurate Retail |
| Liquidity Services vs. Qurate Retail Series | Liquidity Services vs. Qurate Retail | Liquidity Services vs. Dada Nexus | Liquidity Services 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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