Correlation Between PICKN PAY and Blackline

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

By analyzing existing cross correlation between PICKN PAY STORES and Blackline, you can compare the effects of market volatilities on PICKN PAY and Blackline 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 PICKN PAY with a short position of Blackline. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Blackline.

Diversification Opportunities for PICKN PAY and Blackline

0.66

Correlation Coefficient

PICKN PAY  Blackline

Poor diversification

The 3 months correlation between PICKN and Blackline is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and PICKN PAY 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 PICKN PAY STORES are associated (or correlated) with Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of PICKN PAY i.e., PICKN PAY and Blackline go up and down completely randomly.

Pair Corralation between PICKN PAY and Blackline

Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the Blackline. In addition to that, PICKN PAY is 1.26 times more volatile than Blackline. It trades about -0.03 of its total potential returns per unit of risk. Blackline is currently generating about 0.01 per unit of volatility. If you would invest  6,380  in Blackline on September 28, 2024 and sell it today you would lose (530.00) from holding Blackline or give up 8.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

PICKN PAY STORES  vs.  Blackline

PICKN PAY STORES

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PICKN PAY unveiled solid returns over the last few months and may actually be approaching a breakup point.

Blackline

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Blackline reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PICKN PAY and Blackline

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

The idea behind PICKN PAY STORES and Blackline 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.