Correlation Between Ross Stores and Kidpik Corp

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

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

Diversification Opportunities for Ross Stores and Kidpik Corp

0.06

Correlation Coefficient

Ross Stores  Kidpik Corp

Significant diversification

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

Pair Corralation between Ross Stores and Kidpik Corp

Given the investment horizon of 90 days Ross Stores is expected to generate 0.29 times more return on investment than Kidpik Corp. However, Ross Stores is 3.42 times less risky than Kidpik Corp. It trades about 0.04 of its potential returns per unit of risk. Kidpik Corp is currently generating about 0.0 per unit of risk. If you would invest  13,600  in Ross Stores on August 7, 2024 and sell it today you would earn a total of  466.00  from holding Ross Stores or generate 3.43% return on investment over 90 days.

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

Ross Stores  vs.  Kidpik Corp

Ross Stores

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ross Stores is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ross Stores and Kidpik Corp

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

The idea behind Ross Stores and Kidpik Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.