Correlation Between PICKN PAY and Compagnie Financire

Can any of the company-specific risk be diversified away by investing in both PICKN PAY and Compagnie Financire 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 Compagnie Financire 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 Compagnie Financire Richemont, you can compare the effects of market volatilities on PICKN PAY and Compagnie Financire 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 Compagnie Financire. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Compagnie Financire.

Diversification Opportunities for PICKN PAY and Compagnie Financire

0.41

Correlation Coefficient

PICKN PAY  Compagnie Financire

Very weak diversification

The 3 months correlation between PICKN and Compagnie is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and Compagnie Financire Richemont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Financire 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 Compagnie Financire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Financire has no effect on the direction of PICKN PAY i.e., PICKN PAY and Compagnie Financire go up and down completely randomly.

Pair Corralation between PICKN PAY and Compagnie Financire

Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the Compagnie Financire. But the stock apears to be less risky and, when comparing its historical volatility, PICKN PAY STORES is 1.92 times less risky than Compagnie Financire. The stock trades about -0.05 of its potential returns per unit of risk. The Compagnie Financire Richemont is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,350  in Compagnie Financire Richemont on October 5, 2024 and sell it today you would earn a total of  80.00  from holding Compagnie Financire Richemont or generate 5.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

PICKN PAY STORES  vs.  Compagnie Financire Richemont

PICKN PAY STORES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PICKN PAY STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PICKN PAY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Compagnie Financire

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Financire Richemont are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Compagnie Financire is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PICKN PAY and Compagnie Financire

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

The idea behind PICKN PAY STORES and Compagnie Financire Richemont 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.