Correlation Between Didi Global and Pegasystems
Can any of the company-specific risk be diversified away by investing in both Didi Global and Pegasystems 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 Didi Global and Pegasystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Didi Global ADR and Pegasystems, you can compare the effects of market volatilities on Didi Global and Pegasystems 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 Didi Global with a short position of Pegasystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Didi Global and Pegasystems.
Diversification Opportunities for Didi Global and Pegasystems
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Didi and Pegasystems is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Didi Global ADR and Pegasystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pegasystems and Didi Global 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 Didi Global ADR are associated (or correlated) with Pegasystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pegasystems has no effect on the direction of Didi Global i.e., Didi Global and Pegasystems go up and down completely randomly.
Pair Corralation between Didi Global and Pegasystems
Assuming the 90 days horizon Didi Global ADR is expected to generate 2.26 times more return on investment than Pegasystems. However, Didi Global is 2.26 times more volatile than Pegasystems. It trades about 0.15 of its potential returns per unit of risk. Pegasystems is currently generating about 0.08 per unit of risk. If you would invest 299.00 in Didi Global ADR on August 25, 2024 and sell it today you would earn a total of 136.00 from holding Didi Global ADR or generate 45.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 9.26% |
| Values | Daily Returns |
Didi Global ADR vs. Pegasystems
Performance |
| Timeline |
| Didi Global ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Pegasystems |
Didi Global and Pegasystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Didi Global and Pegasystems
The main advantage of trading using opposite Didi Global and Pegasystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Didi Global position performs unexpectedly, Pegasystems 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 Pegasystems will offset losses from the drop in Pegasystems' long position.| Didi Global vs. LYFT Inc | Didi Global vs. Unity Software | Didi Global vs. Uber Technologies | Didi Global vs. Digital Turbine |
| Pegasystems vs. Wex Inc | Pegasystems vs. Cognex | Pegasystems vs. Progress Software | Pegasystems vs. Fair Isaac |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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