Correlation Between Kidpik Corp and Jd

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

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

Diversification Opportunities for Kidpik Corp and Jd

-0.14

Correlation Coefficient

Kidpik Corp  Jd

Good diversification

The 3 months correlation between Kidpik and Jd is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and Jd Com Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jd Com Inc and Kidpik Corp 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 Kidpik Corp are associated (or correlated) with Jd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jd Com Inc has no effect on the direction of Kidpik Corp i.e., Kidpik Corp and Jd go up and down completely randomly.

Pair Corralation between Kidpik Corp and Jd

Considering the 90-day investment horizon Kidpik Corp is expected to generate 3.2 times less return on investment than Jd. But when comparing it to its historical volatility, Kidpik Corp is 1.42 times less risky than Jd. It trades about 0.03 of its potential returns per unit of risk. Jd Com Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,443  in Jd Com Inc on September 1, 2024 and sell it today you would earn a total of  274.00  from holding Jd Com Inc or generate 18.99% return on investment over 90 days.

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

Kidpik Corp  vs.  Jd Com Inc

Kidpik Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kidpik Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Kidpik Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Jd Com Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jd Com Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, Jd reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kidpik Corp and Jd

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

The idea behind Kidpik Corp and Jd Com Inc 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.