Correlation Between Kidpik Corp and WEBUY GLOBAL

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

By analyzing existing cross correlation between Kidpik Corp and WEBUY GLOBAL LTD, you can compare the effects of market volatilities on Kidpik Corp and WEBUY GLOBAL 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 WEBUY GLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kidpik Corp and WEBUY GLOBAL.

Diversification Opportunities for Kidpik Corp and WEBUY GLOBAL

-0.06

Correlation Coefficient

Kidpik Corp  WEBUY GLOBAL

Good diversification

The 3 months correlation between Kidpik and WEBUY is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and WEBUY GLOBAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEBUY GLOBAL LTD 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 WEBUY GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEBUY GLOBAL LTD has no effect on the direction of Kidpik Corp i.e., Kidpik Corp and WEBUY GLOBAL go up and down completely randomly.

Pair Corralation between Kidpik Corp and WEBUY GLOBAL

Considering the 90-day investment horizon Kidpik Corp is expected to under-perform the WEBUY GLOBAL. But the stock apears to be less risky and, when comparing its historical volatility, Kidpik Corp is 1.36 times less risky than WEBUY GLOBAL. The stock trades about -0.05 of its potential returns per unit of risk. The WEBUY GLOBAL LTD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  19.00  in WEBUY GLOBAL LTD on September 20, 2024 and sell it today you would lose (1.00) from holding WEBUY GLOBAL LTD or give up 5.26% of portfolio value over 90 days.

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

Kidpik Corp  vs.  WEBUY GLOBAL LTD

Kidpik Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kidpik Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Kidpik Corp is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

WEBUY GLOBAL LTD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WEBUY GLOBAL LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, WEBUY GLOBAL showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kidpik Corp and WEBUY GLOBAL

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

The idea behind Kidpik Corp and WEBUY GLOBAL LTD 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.