Correlation Between Prosus NV and Delivery Hero
Can any of the company-specific risk be diversified away by investing in both Prosus NV and Delivery Hero 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 Prosus NV and Delivery Hero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosus NV and Delivery Hero SE, you can compare the effects of market volatilities on Prosus NV and Delivery Hero 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 Prosus NV with a short position of Delivery Hero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus NV and Delivery Hero.
Diversification Opportunities for Prosus NV and Delivery Hero
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prosus and Delivery is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Prosus NV and Delivery Hero SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delivery Hero SE and Prosus NV 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 Prosus NV are associated (or correlated) with Delivery Hero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delivery Hero SE has no effect on the direction of Prosus NV i.e., Prosus NV and Delivery Hero go up and down completely randomly.
Pair Corralation between Prosus NV and Delivery Hero
Assuming the 90 days horizon Prosus NV is expected to generate 2.4 times less return on investment than Delivery Hero. But when comparing it to its historical volatility, Prosus NV is 2.12 times less risky than Delivery Hero. It trades about 0.07 of its potential returns per unit of risk. Delivery Hero SE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,901 in Delivery Hero SE on September 1, 2024 and sell it today you would earn a total of 974.00 from holding Delivery Hero SE or generate 33.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.24% |
| Values | Daily Returns |
Prosus NV vs. Delivery Hero SE
Performance |
| Timeline |
| Prosus NV |
| Delivery Hero SE |
Prosus NV and Delivery Hero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosus NV and Delivery Hero
The main advantage of trading using opposite Prosus NV and Delivery Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus NV position performs unexpectedly, Delivery Hero 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 Delivery Hero will offset losses from the drop in Delivery Hero's long position.| Prosus NV vs. Sekisui Chemical Co | Prosus NV vs. Insteel Industries | Prosus NV vs. Mitsubishi Gas Chemical | Prosus NV vs. TIANDE CHEMICAL |
| Delivery Hero vs. Computershare Limited | Delivery Hero vs. Hemisphere Energy Corp | Delivery Hero vs. Iridium Communications | Delivery Hero vs. Ribbon Communications |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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