Correlation Between DoorDash, and Yelp

Can any of the company-specific risk be diversified away by investing in both DoorDash, and Yelp 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 DoorDash, and Yelp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DoorDash, Class A and Yelp Inc, you can compare the effects of market volatilities on DoorDash, and Yelp 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 DoorDash, with a short position of Yelp. Check out your portfolio center. Please also check ongoing floating volatility patterns of DoorDash, and Yelp.

Diversification Opportunities for DoorDash, and Yelp

-0.27

Correlation Coefficient

DoorDash,  Yelp

Very good diversification

The 3 months correlation between DoorDash, and Yelp is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding DoorDash, Class A and Yelp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yelp Inc and DoorDash, 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 DoorDash, Class A are associated (or correlated) with Yelp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yelp Inc has no effect on the direction of DoorDash, i.e., DoorDash, and Yelp go up and down completely randomly.

Pair Corralation between DoorDash, and Yelp

Given the investment horizon of 90 days DoorDash, Class A is expected to generate 1.25 times more return on investment than Yelp. However, DoorDash, is 1.25 times more volatile than Yelp Inc. It trades about 0.06 of its potential returns per unit of risk. Yelp Inc is currently generating about -0.02 per unit of risk. If you would invest  16,960  in DoorDash, Class A on December 29, 2024 and sell it today you would earn a total of  1,301  from holding DoorDash, Class A or generate 7.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

DoorDash, Class A  vs.  Yelp Inc

DoorDash, Class A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DoorDash, Class A are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, DoorDash, may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Yelp Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yelp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, Yelp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with DoorDash, and Yelp

The main advantage of trading using opposite DoorDash, and Yelp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DoorDash, position performs unexpectedly, Yelp 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 Yelp will offset losses from the drop in Yelp's long position.

The idea behind DoorDash, Class A and Yelp Inc 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.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.