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 Inc Adr, 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

-0.09

Correlation Coefficient

Kidpik Corp  JD

Good diversification

The 3 months correlation between Kidpik and JD is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and JD Inc Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Inc Adr 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 Inc Adr 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 7.88 times less return on investment than JD. In addition to that, Kidpik Corp is 1.3 times more volatile than JD Inc Adr. It trades about 0.01 of its total potential returns per unit of risk. JD Inc Adr is currently generating about 0.14 per unit of volatility. If you would invest  2,700  in JD Inc Adr on August 30, 2024 and sell it today you would earn a total of  1,019  from holding JD Inc Adr or generate 37.74% 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 Inc Adr

Kidpik Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kidpik Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

JD Inc Adr

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in JD Inc Adr are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, JD exhibited 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 Inc Adr 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.