Correlation Between Sea and Delivery Hero
Can any of the company-specific risk be diversified away by investing in both Sea 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 Sea and Delivery Hero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Delivery Hero SE, you can compare the effects of market volatilities on Sea 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 Sea with a short position of Delivery Hero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Delivery Hero.
Diversification Opportunities for Sea and Delivery Hero
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sea and Delivery is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sea 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 Sea 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 Sea 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 Sea i.e., Sea and Delivery Hero go up and down completely randomly.
Pair Corralation between Sea and Delivery Hero
Allowing for the 90-day total investment horizon Sea is expected to generate 1.25 times more return on investment than Delivery Hero. However, Sea is 1.25 times more volatile than Delivery Hero SE. It trades about 0.21 of its potential returns per unit of risk. Delivery Hero SE is currently generating about -0.2 per unit of risk. If you would invest 9,926 in Sea on August 28, 2024 and sell it today you would earn a total of 1,467 from holding Sea or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sea vs. Delivery Hero SE
Performance |
| Timeline |
| Sea |
| Delivery Hero SE |
Sea and Delivery Hero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Delivery Hero
The main advantage of trading using opposite Sea and Delivery Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea 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.| Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
| Delivery Hero vs. 1StdibsCom | Delivery Hero vs. Natural Health Trend | Delivery Hero vs. Hour Loop | Delivery Hero vs. Liquidity Services |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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