Correlation Between Pick N and CoreShares Preference

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

By analyzing existing cross correlation between Pick N Pay and CoreShares Preference Share, you can compare the effects of market volatilities on Pick N and CoreShares Preference 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 Pick N with a short position of CoreShares Preference. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pick N and CoreShares Preference.

Diversification Opportunities for Pick N and CoreShares Preference

0.0

Correlation Coefficient

Pick N  CoreShares Preference

Pay attention - limited upside

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

Pair Corralation between Pick N and CoreShares Preference

If you would invest  236,100  in Pick N Pay on September 15, 2024 and sell it today you would earn a total of  74,000  from holding Pick N Pay or generate 31.34% return on investment over 90 days.

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

Pick N Pay  vs.  CoreShares Preference Share

Pick N Pay

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pick N Pay are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Pick N exhibited solid returns over the last few months and may actually be approaching a breakup point.

CoreShares Preference

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CoreShares Preference Share has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, CoreShares Preference is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pick N and CoreShares Preference

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

The idea behind Pick N Pay and CoreShares Preference Share 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 Transaction History module to view history of all your transactions and understand their impact on performance.