Correlation Between Pop Culture and One Step

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

By analyzing existing cross correlation between Pop Culture Group and One Step Vending, you can compare the effects of market volatilities on Pop Culture and One Step 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 Pop Culture with a short position of One Step. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pop Culture and One Step.

Diversification Opportunities for Pop Culture and One Step

-0.43

Correlation Coefficient

Pop Culture  One Step

Very good diversification

The 3 months correlation between Pop and One is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pop Culture Group and One Step Vending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Step Vending and Pop Culture 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 Pop Culture Group are associated (or correlated) with One Step. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Step Vending has no effect on the direction of Pop Culture i.e., Pop Culture and One Step go up and down completely randomly.

Pair Corralation between Pop Culture and One Step

Given the investment horizon of 90 days Pop Culture Group is expected to generate 0.55 times more return on investment than One Step. However, Pop Culture Group is 1.81 times less risky than One Step. It trades about 0.08 of its potential returns per unit of risk. One Step Vending is currently generating about 0.0 per unit of risk. If you would invest  56.00  in Pop Culture Group on May 1, 2025 and sell it today you would earn a total of  13.00  from holding Pop Culture Group or generate 23.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Pop Culture Group  vs.  One Step Vending

Pop Culture Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pop Culture Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Pop Culture reported solid returns over the last few months and may actually be approaching a breakup point.

One Step Vending

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pop Culture and One Step

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

The idea behind Pop Culture Group and One Step Vending 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.