Correlation Between REGION GROUP and PICKN PAY
Can any of the company-specific risk be diversified away by investing in both REGION GROUP and PICKN PAY 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 REGION GROUP and PICKN PAY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGION GROUP STAPLED and PICKN PAY STORES, you can compare the effects of market volatilities on REGION GROUP and PICKN PAY 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 REGION GROUP with a short position of PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGION GROUP and PICKN PAY.
Diversification Opportunities for REGION GROUP and PICKN PAY
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between REGION and PICKN is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding REGION GROUP STAPLED and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES and REGION GROUP 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 REGION GROUP STAPLED are associated (or correlated) with PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of REGION GROUP i.e., REGION GROUP and PICKN PAY go up and down completely randomly.
Pair Corralation between REGION GROUP and PICKN PAY
Assuming the 90 days trading horizon REGION GROUP is expected to generate 7.71 times less return on investment than PICKN PAY. But when comparing it to its historical volatility, REGION GROUP STAPLED is 2.3 times less risky than PICKN PAY. It trades about 0.1 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 127.00 in PICKN PAY STORES on September 1, 2024 and sell it today you would earn a total of 25.00 from holding PICKN PAY STORES or generate 19.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGION GROUP STAPLED vs. PICKN PAY STORES
Performance |
| Timeline |
| REGION GROUP STAPLED |
| PICKN PAY STORES |
REGION GROUP and PICKN PAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGION GROUP and PICKN PAY
The main advantage of trading using opposite REGION GROUP and PICKN PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGION GROUP position performs unexpectedly, PICKN PAY 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 PICKN PAY will offset losses from the drop in PICKN PAY's long position.| REGION GROUP vs. PICKN PAY STORES | REGION GROUP vs. RETAIL FOOD GROUP | REGION GROUP vs. Chunghwa Telecom Co | REGION GROUP vs. Verizon Communications |
| PICKN PAY vs. AOYAMA TRADING | PICKN PAY vs. ON SEMICONDUCTOR | PICKN PAY vs. Taiwan Semiconductor Manufacturing | PICKN PAY vs. BE Semiconductor Industries |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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