Correlation Between PDD Holdings and Delivery Hero
Can any of the company-specific risk be diversified away by investing in both PDD Holdings 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 PDD Holdings and Delivery Hero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Delivery Hero SE, you can compare the effects of market volatilities on PDD Holdings 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 PDD Holdings with a short position of Delivery Hero. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Delivery Hero.
Diversification Opportunities for PDD Holdings and Delivery Hero
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PDD and Delivery is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings 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 PDD Holdings 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 PDD Holdings 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 PDD Holdings i.e., PDD Holdings and Delivery Hero go up and down completely randomly.
Pair Corralation between PDD Holdings and Delivery Hero
Considering the 90-day investment horizon PDD Holdings is expected to under-perform the Delivery Hero. In addition to that, PDD Holdings is 1.27 times more volatile than Delivery Hero SE. It trades about -0.32 of its total potential returns per unit of risk. Delivery Hero SE is currently generating about -0.12 per unit of volatility. If you would invest 420.00 in Delivery Hero SE on September 1, 2024 and sell it today you would lose (27.00) from holding Delivery Hero SE or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. Delivery Hero SE
Performance |
| Timeline |
| PDD Holdings |
| Delivery Hero SE |
PDD Holdings and Delivery Hero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and Delivery Hero
The main advantage of trading using opposite PDD Holdings and Delivery Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings 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.| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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