Correlation Between HelloFresh and Dennys Corp

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

By analyzing existing cross correlation between HelloFresh SE and Dennys Corp, you can compare the effects of market volatilities on HelloFresh and Dennys Corp 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 HelloFresh with a short position of Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of HelloFresh and Dennys Corp.

Diversification Opportunities for HelloFresh and Dennys Corp

-0.07

Correlation Coefficient

HelloFresh  Dennys Corp

Good diversification

The 3 months correlation between HelloFresh and Dennys is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding HelloFresh SE and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp and HelloFresh 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 HelloFresh SE are associated (or correlated) with Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of HelloFresh i.e., HelloFresh and Dennys Corp go up and down completely randomly.

Pair Corralation between HelloFresh and Dennys Corp

Assuming the 90 days horizon HelloFresh SE is expected to under-perform the Dennys Corp. In addition to that, HelloFresh is 1.97 times more volatile than Dennys Corp. It trades about -0.1 of its total potential returns per unit of risk. Dennys Corp is currently generating about 0.05 per unit of volatility. If you would invest  628.00  in Dennys Corp on October 6, 2024 and sell it today you would earn a total of  13.00  from holding Dennys Corp or generate 2.07% return on investment over 90 days.

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

HelloFresh SE  vs.  Dennys Corp

HelloFresh SE

Risk-Adjusted Performance

4 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HelloFresh SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, HelloFresh reported solid returns over the last few months and may actually be approaching a breakup point.

Dennys Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dennys Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Dennys Corp may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with HelloFresh and Dennys Corp

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

The idea behind HelloFresh SE and Dennys Corp 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.