Correlation Between Kidpik Corp and Macys
Can any of the company-specific risk be diversified away by investing in both Kidpik Corp and Macys 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 Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kidpik Corp and Macys Inc, you can compare the effects of market volatilities on Kidpik Corp and Macys 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 Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kidpik Corp and Macys.
Diversification Opportunities for Kidpik Corp and Macys
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kidpik and Macys is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys 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 Macys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macys Inc has no effect on the direction of Kidpik Corp i.e., Kidpik Corp and Macys go up and down completely randomly.
Pair Corralation between Kidpik Corp and Macys
Considering the 90-day investment horizon Kidpik Corp is expected to generate 3.92 times more return on investment than Macys. However, Kidpik Corp is 3.92 times more volatile than Macys Inc. It trades about 0.14 of its potential returns per unit of risk. Macys Inc is currently generating about 0.13 per unit of risk. If you would invest 243.00 in Kidpik Corp on September 24, 2024 and sell it today you would earn a total of 47.00 from holding Kidpik Corp or generate 19.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kidpik Corp vs. Macys Inc
Performance |
Timeline |
Kidpik Corp |
Macys Inc |
Kidpik Corp and Macys Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kidpik Corp and Macys
The main advantage of trading using opposite Kidpik Corp and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kidpik Corp position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.Kidpik Corp vs. Macys Inc | Kidpik Corp vs. Wayfair | Kidpik Corp vs. 1StdibsCom | Kidpik Corp vs. AutoNation |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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