Correlation Between Kidpik Corp and BoohooCom PLC

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

By analyzing existing cross correlation between Kidpik Corp and BoohooCom PLC ADR, you can compare the effects of market volatilities on Kidpik Corp and BoohooCom PLC 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 BoohooCom PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kidpik Corp and BoohooCom PLC.

Diversification Opportunities for Kidpik Corp and BoohooCom PLC

-0.07

Correlation Coefficient

Kidpik Corp  BoohooCom PLC

Good diversification

The 3 months correlation between Kidpik and BoohooCom is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and BoohooCom PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BoohooCom PLC ADR 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 BoohooCom PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BoohooCom PLC ADR has no effect on the direction of Kidpik Corp i.e., Kidpik Corp and BoohooCom PLC go up and down completely randomly.

Pair Corralation between Kidpik Corp and BoohooCom PLC

If you would invest  891.00  in BoohooCom PLC ADR on March 18, 2024 and sell it today you would earn a total of  0.00  from holding BoohooCom PLC ADR or generate 0.0% return on investment over 90 days.

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

Kidpik Corp  vs.  BoohooCom PLC ADR

Kidpik Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kidpik Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in July 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

BoohooCom PLC ADR

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BoohooCom PLC ADR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, BoohooCom PLC may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Kidpik Corp and BoohooCom PLC

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

The idea behind Kidpik Corp and BoohooCom PLC ADR 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.