Correlation Between PetMed Express and ALIBHLINFTECUNSPADR

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

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

Diversification Opportunities for PetMed Express and ALIBHLINFTECUNSPADR

0.48

Correlation Coefficient

PetMed Express  ALIBHLINFTECUNSPADR

Very weak diversification

The 3 months correlation between PetMed and ALIBHLINFTECUNSPADR is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding PetMed Express and ALIBHLINFTECUNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIBHLINFTECUNSPADR and PetMed Express 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 PetMed Express are associated (or correlated) with ALIBHLINFTECUNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIBHLINFTECUNSPADR has no effect on the direction of PetMed Express i.e., PetMed Express and ALIBHLINFTECUNSPADR go up and down completely randomly.

Pair Corralation between PetMed Express and ALIBHLINFTECUNSPADR

Assuming the 90 days horizon PetMed Express is expected to under-perform the ALIBHLINFTECUNSPADR. But the stock apears to be less risky and, when comparing its historical volatility, PetMed Express is 1.08 times less risky than ALIBHLINFTECUNSPADR. The stock trades about -0.05 of its potential returns per unit of risk. The ALIBHLINFTECUNSPADR is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,210  in ALIBHLINFTECUNSPADR on April 24, 2025 and sell it today you would lose (245.00) from holding ALIBHLINFTECUNSPADR or give up 20.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

PetMed Express  vs.  ALIBHLINFTECUNSPADR

PetMed Express

Risk-Adjusted Performance

Weak

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

ALIBHLINFTECUNSPADR

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PetMed Express and ALIBHLINFTECUNSPADR

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

The idea behind PetMed Express and ALIBHLINFTECUNSPADR 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.