Correlation Between PFSweb and Lichen China

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

By analyzing existing cross correlation between PFSweb Inc and Lichen China Limited, you can compare the effects of market volatilities on PFSweb and Lichen China 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 PFSweb with a short position of Lichen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of PFSweb and Lichen China.

Diversification Opportunities for PFSweb and Lichen China

0.0

Correlation Coefficient

PFSweb  Lichen China

Pay attention - limited upside

The 3 months correlation between PFSweb and Lichen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PFSweb Inc and Lichen China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lichen China Limited and PFSweb 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 PFSweb Inc are associated (or correlated) with Lichen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lichen China Limited has no effect on the direction of PFSweb i.e., PFSweb and Lichen China go up and down completely randomly.

Pair Corralation between PFSweb and Lichen China

If you would invest (100.00) in PFSweb Inc on December 28, 2024 and sell it today you would earn a total of  100.00  from holding PFSweb Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PFSweb Inc  vs.  Lichen China Limited

PFSweb Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days PFSweb Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PFSweb is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Lichen China Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lichen China Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PFSweb and Lichen China

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

The idea behind PFSweb Inc and Lichen China Limited 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.