Correlation Between Didi Global and Vertex
Can any of the company-specific risk be diversified away by investing in both Didi Global and Vertex 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 Vertex 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 Vertex, you can compare the effects of market volatilities on Didi Global and Vertex 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 Vertex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Didi Global and Vertex.
Diversification Opportunities for Didi Global and Vertex
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Didi and Vertex is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Didi Global ADR and Vertex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertex 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 Vertex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertex has no effect on the direction of Didi Global i.e., Didi Global and Vertex go up and down completely randomly.
Pair Corralation between Didi Global and Vertex
If you would invest 4,246 in Vertex on August 27, 2024 and sell it today you would earn a total of 1,137 from holding Vertex or generate 26.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Didi Global ADR vs. Vertex
Performance |
| Timeline |
| Didi Global ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vertex |
Didi Global and Vertex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Didi Global and Vertex
The main advantage of trading using opposite Didi Global and Vertex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Didi Global position performs unexpectedly, Vertex 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 Vertex will offset losses from the drop in Vertex's long position.| Didi Global vs. LYFT Inc | Didi Global vs. Unity Software | Didi Global vs. Uber Technologies | Didi Global vs. Digital Turbine |
| Vertex vs. Expensify | Vertex vs. Clearwater Analytics Holdings | Vertex vs. Sprinklr | Vertex vs. Alkami Technology |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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