Correlation Between Redbubble and Delivery Hero
Can any of the company-specific risk be diversified away by investing in both Redbubble 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 Redbubble and Delivery Hero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redbubble Limited and Delivery Hero SE, you can compare the effects of market volatilities on Redbubble 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 Redbubble with a short position of Delivery Hero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redbubble and Delivery Hero.
Diversification Opportunities for Redbubble and Delivery Hero
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Redbubble and Delivery is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Redbubble Limited 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 Redbubble 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 Redbubble Limited 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 Redbubble i.e., Redbubble and Delivery Hero go up and down completely randomly.
Pair Corralation between Redbubble and Delivery Hero
Assuming the 90 days horizon Redbubble Limited is expected to generate 2.22 times more return on investment than Delivery Hero. However, Redbubble is 2.22 times more volatile than Delivery Hero SE. It trades about -0.08 of its potential returns per unit of risk. Delivery Hero SE is currently generating about -0.25 per unit of risk. If you would invest 25.00 in Redbubble Limited on August 25, 2024 and sell it today you would lose (3.00) from holding Redbubble Limited or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Redbubble Limited vs. Delivery Hero SE
Performance |
| Timeline |
| Redbubble Limited |
| Delivery Hero SE |
Redbubble and Delivery Hero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redbubble and Delivery Hero
The main advantage of trading using opposite Redbubble and Delivery Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redbubble 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.| Redbubble vs. Delivery Hero SE | Redbubble vs. 1StdibsCom | Redbubble vs. Natural Health Trend | Redbubble vs. Monotaro Co |
| Delivery Hero vs. Monotaro Co | Delivery Hero vs. Phonex Inc | Delivery Hero vs. 1StdibsCom | Delivery Hero vs. Natural Health Trend |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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