Correlation Between TRADEGATE and PICKN PAY

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

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

Diversification Opportunities for TRADEGATE and PICKN PAY

0.37

Correlation Coefficient

TRADEGATE  PICKN PAY

Weak diversification

The 3 months correlation between TRADEGATE and PICKN is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES and TRADEGATE 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 TRADEGATE are associated (or correlated) with PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of TRADEGATE i.e., TRADEGATE and PICKN PAY go up and down completely randomly.

Pair Corralation between TRADEGATE and PICKN PAY

Assuming the 90 days trading horizon TRADEGATE is expected to generate 0.15 times more return on investment than PICKN PAY. However, TRADEGATE is 6.82 times less risky than PICKN PAY. It trades about -0.09 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about -0.1 per unit of risk. If you would invest  9,050  in TRADEGATE on December 4, 2024 and sell it today you would lose (150.00) from holding TRADEGATE or give up 1.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

TRADEGATE  vs.  PICKN PAY STORES

TRADEGATE

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRADEGATE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TRADEGATE is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

PICKN PAY STORES

Risk-Adjusted Performance

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with TRADEGATE and PICKN PAY

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

The idea behind TRADEGATE and PICKN PAY STORES 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.