Correlation Between Kidpik Corp and MOGU

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

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

Diversification Opportunities for Kidpik Corp and MOGU

-0.25

Correlation Coefficient

Kidpik Corp  MOGU

Very good diversification

The 3 months correlation between Kidpik and MOGU is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kidpik Corp and MOGU Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOGU 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 MOGU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOGU Inc has no effect on the direction of Kidpik Corp i.e., Kidpik Corp and MOGU go up and down completely randomly.

Pair Corralation between Kidpik Corp and MOGU

Considering the 90-day investment horizon Kidpik Corp is expected to under-perform the MOGU. In addition to that, Kidpik Corp is 1.07 times more volatile than MOGU Inc. It trades about -0.02 of its total potential returns per unit of risk. MOGU Inc is currently generating about 0.02 per unit of volatility. If you would invest  238.00  in MOGU Inc on September 1, 2024 and sell it today you would lose (16.00) from holding MOGU Inc or give up 6.72% 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.  MOGU 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.

MOGU Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOGU Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal technical and fundamental indicators, MOGU unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kidpik Corp and MOGU

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

The idea behind Kidpik Corp and MOGU 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.