Correlation Between Astra International and HelloFresh

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

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

Diversification Opportunities for Astra International and HelloFresh

-0.32

Correlation Coefficient

Astra International  HelloFresh

Very good diversification

The 3 months correlation between Astra and HelloFresh is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk and HelloFresh SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HelloFresh SE and Astra International 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 Astra International Tbk 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 Astra International i.e., Astra International and HelloFresh go up and down completely randomly.

Pair Corralation between Astra International and HelloFresh

Assuming the 90 days horizon Astra International Tbk is expected to under-perform the HelloFresh. But the pink sheet apears to be less risky and, when comparing its historical volatility, Astra International Tbk is 3.01 times less risky than HelloFresh. The pink sheet trades about -0.04 of its potential returns per unit of risk. The HelloFresh SE is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,950  in HelloFresh SE on October 3, 2024 and sell it today you would lose (761.00) from holding HelloFresh SE or give up 39.03% of portfolio value over 90 days.

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

Astra International Tbk  vs.  HelloFresh SE

Astra International Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra International Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 Astra International and HelloFresh

The main advantage of trading using opposite Astra International and HelloFresh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International 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 Astra International Tbk 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.