Correlation Between Dingdong ADR and Coles
Can any of the company-specific risk be diversified away by investing in both Dingdong ADR and Coles 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 Dingdong ADR and Coles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dingdong ADR and Coles Group, you can compare the effects of market volatilities on Dingdong ADR and Coles 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 Dingdong ADR with a short position of Coles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dingdong ADR and Coles.
Diversification Opportunities for Dingdong ADR and Coles
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dingdong and Coles is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dingdong ADR and Coles Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coles Group and Dingdong ADR 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 Dingdong ADR are associated (or correlated) with Coles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coles Group has no effect on the direction of Dingdong ADR i.e., Dingdong ADR and Coles go up and down completely randomly.
Pair Corralation between Dingdong ADR and Coles
Considering the 90-day investment horizon Dingdong ADR is expected to generate 1.28 times more return on investment than Coles. However, Dingdong ADR is 1.28 times more volatile than Coles Group. It trades about 0.11 of its potential returns per unit of risk. Coles Group is currently generating about 0.03 per unit of risk. If you would invest 141.00 in Dingdong ADR on August 28, 2024 and sell it today you would earn a total of 230.00 from holding Dingdong ADR or generate 163.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 65.07% |
| Values | Daily Returns |
Dingdong ADR vs. Coles Group
Performance |
| Timeline |
| Dingdong ADR |
| Coles Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Dingdong ADR and Coles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dingdong ADR and Coles
The main advantage of trading using opposite Dingdong ADR and Coles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dingdong ADR position performs unexpectedly, Coles 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 Coles will offset losses from the drop in Coles' long position.| Dingdong ADR vs. Village Super Market | Dingdong ADR vs. Weis Markets | Dingdong ADR vs. Sendas Distribuidora SA | Dingdong ADR vs. Ingles Markets Incorporated |
| Coles vs. Seven i Holdings | Coles vs. Grocery Outlet Holding | Coles vs. Krispy Kreme | Coles vs. Koninklijke Ahold Delhaize |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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