Correlation Between AKA Brands and Kidpik Corp

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

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

Diversification Opportunities for AKA Brands and Kidpik Corp

0.18

Correlation Coefficient

AKA Brands  Kidpik Corp

Average diversification

The 3 months correlation between AKA and Kidpik is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding AKA Brands Holding and Kidpik Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kidpik Corp and AKA Brands 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 AKA Brands Holding 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 AKA Brands i.e., AKA Brands and Kidpik Corp go up and down completely randomly.

Pair Corralation between AKA Brands and Kidpik Corp

Considering the 90-day investment horizon AKA Brands Holding is expected to generate 0.85 times more return on investment than Kidpik Corp. However, AKA Brands Holding is 1.17 times less risky than Kidpik Corp. It trades about 0.05 of its potential returns per unit of risk. Kidpik Corp is currently generating about 0.02 per unit of risk. If you would invest  1,452  in AKA Brands Holding on September 19, 2024 and sell it today you would earn a total of  708.00  from holding AKA Brands Holding or generate 48.76% return on investment over 90 days.

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

AKA Brands Holding  vs.  Kidpik Corp

AKA Brands Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AKA Brands Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's forward-looking signals 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

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 latest weak performance, the Stock's forward indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with AKA Brands and Kidpik Corp

The main advantage of trading using opposite AKA Brands and Kidpik Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKA Brands 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 AKA Brands Holding 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.