Correlation Between PICKN PAY and Hitachi Construction

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

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

Diversification Opportunities for PICKN PAY and Hitachi Construction

0.3

Correlation Coefficient

PICKN PAY  Hitachi Construction

Weak diversification

The 3 months correlation between PICKN and Hitachi is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and Hitachi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Construction and PICKN PAY 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 PICKN PAY STORES are associated (or correlated) with Hitachi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Construction has no effect on the direction of PICKN PAY i.e., PICKN PAY and Hitachi Construction go up and down completely randomly.

Pair Corralation between PICKN PAY and Hitachi Construction

Assuming the 90 days trading horizon PICKN PAY STORES is expected to generate 1.52 times more return on investment than Hitachi Construction. However, PICKN PAY is 1.52 times more volatile than Hitachi Construction Machinery. It trades about 0.01 of its potential returns per unit of risk. Hitachi Construction Machinery is currently generating about -0.01 per unit of risk. If you would invest  124.00  in PICKN PAY STORES on April 24, 2025 and sell it today you would lose (1.00) from holding PICKN PAY STORES or give up 0.81% of portfolio value over 90 days.

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

PICKN PAY STORES  vs.  Hitachi Construction Machinery

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 comparatively stable basic indicators, PICKN PAY is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Hitachi Construction

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hitachi Construction Machinery has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hitachi Construction is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PICKN PAY and Hitachi Construction

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

The idea behind PICKN PAY STORES and Hitachi Construction Machinery 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.