Correlation Between ASPEN TECHINC and Delivery Hero
Can any of the company-specific risk be diversified away by investing in both ASPEN TECHINC 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 ASPEN TECHINC and Delivery Hero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASPEN TECHINC DL and Delivery Hero SE, you can compare the effects of market volatilities on ASPEN TECHINC 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 ASPEN TECHINC with a short position of Delivery Hero. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASPEN TECHINC and Delivery Hero.
Diversification Opportunities for ASPEN TECHINC and Delivery Hero
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASPEN and Delivery is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ASPEN TECHINC DL 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 ASPEN TECHINC 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 ASPEN TECHINC DL 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 ASPEN TECHINC i.e., ASPEN TECHINC and Delivery Hero go up and down completely randomly.
Pair Corralation between ASPEN TECHINC and Delivery Hero
Assuming the 90 days horizon ASPEN TECHINC is expected to generate 1.15 times less return on investment than Delivery Hero. But when comparing it to its historical volatility, ASPEN TECHINC DL is 1.69 times less risky than Delivery Hero. It trades about 0.02 of its potential returns per unit of risk. Delivery Hero SE is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,993 in Delivery Hero SE on August 30, 2024 and sell it today you would lose (213.00) from holding Delivery Hero SE or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASPEN TECHINC DL vs. Delivery Hero SE
Performance |
| Timeline |
| ASPEN TECHINC DL |
| Delivery Hero SE |
ASPEN TECHINC and Delivery Hero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASPEN TECHINC and Delivery Hero
The main advantage of trading using opposite ASPEN TECHINC and Delivery Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASPEN TECHINC 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.The idea behind ASPEN TECHINC DL and Delivery Hero SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Delivery Hero vs. American Homes 4 | Delivery Hero vs. Aedas Homes SA | Delivery Hero vs. TIANDE CHEMICAL | Delivery Hero vs. Westlake Chemical |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |