Correlation Between PT Bank and HelloFresh

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

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

Diversification Opportunities for PT Bank and HelloFresh

-0.62

Correlation Coefficient

PT Bank  HelloFresh

Excellent diversification

The 3 months correlation between PBCRF and HelloFresh is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and HelloFresh SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HelloFresh SE and PT Bank 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 PT Bank Central are associated (or correlated) with HelloFresh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HelloFresh SE has no effect on the direction of PT Bank i.e., PT Bank and HelloFresh go up and down completely randomly.

Pair Corralation between PT Bank and HelloFresh

Assuming the 90 days horizon PT Bank Central is expected to generate 0.75 times more return on investment than HelloFresh. However, PT Bank Central is 1.33 times less risky than HelloFresh. It trades about 0.02 of its potential returns per unit of risk. HelloFresh SE is currently generating about 0.0 per unit of risk. If you would invest  59.00  in PT Bank Central on October 3, 2024 and sell it today you would lose (2.00) from holding PT Bank Central or give up 3.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.96%
Values	Daily Returns

PT Bank Central  vs.  HelloFresh SE

PT Bank Central

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Central has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

HelloFresh SE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HelloFresh SE are ranked lower than 5 (%) 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.

Pair Trading with PT Bank and HelloFresh

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

The idea behind PT Bank Central and HelloFresh 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.