Correlation Between Qurate Retail and Kidpik Corp

Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Kidpik Corp 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 Qurate Retail and Kidpik Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Qurate Retail Series and Kidpik Corp, you can compare the effects of market volatilities on Qurate Retail and Kidpik Corp 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 Qurate Retail with a short position of Kidpik Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Kidpik Corp.

Diversification Opportunities for Qurate Retail and Kidpik Corp

-0.16

Correlation Coefficient

Qurate Retail  Kidpik Corp

Good diversification

The 3 months correlation between Qurate and Kidpik is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Kidpik Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidpik Corp and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Kidpik Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kidpik Corp has no effect on the direction of Qurate Retail i.e., Qurate Retail and Kidpik Corp go up and down completely randomly.

Pair Corralation between Qurate Retail and Kidpik Corp

Assuming the 90 days horizon Qurate Retail Series is expected to under-perform the Kidpik Corp. But the stock apears to be less risky and, when comparing its historical volatility, Qurate Retail Series is 1.48 times less risky than Kidpik Corp. The stock trades about -0.19 of its potential returns per unit of risk. The Kidpik Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  423.00  in Kidpik Corp on February 11, 2024 and sell it today you would lose (49.00) from holding Kidpik Corp or give up 11.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Qurate Retail Series  vs.  Kidpik Corp

Qurate Retail Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qurate Retail Series has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Kidpik Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kidpik Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady forward indicators, Kidpik Corp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Qurate Retail and Kidpik Corp

The main advantage of trading using opposite Qurate Retail and Kidpik Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Kidpik Corp 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 Kidpik Corp will offset losses from the drop in Kidpik Corp's long position.

The idea behind Qurate Retail Series and Kidpik Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.