Correlation Between Phonex and Delivery Hero

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

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

Diversification Opportunities for Phonex and Delivery Hero

0.18

Correlation Coefficient

Phonex  Delivery Hero

Average diversification

The 3 months correlation between Phonex and Delivery is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Phonex Inc 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 Phonex 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 Phonex Inc 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 Phonex i.e., Phonex and Delivery Hero go up and down completely randomly.

Pair Corralation between Phonex and Delivery Hero

Given the investment horizon of 90 days Phonex Inc is expected to generate 2.09 times more return on investment than Delivery Hero. However, Phonex is 2.09 times more volatile than Delivery Hero SE. It trades about 0.08 of its potential returns per unit of risk. Delivery Hero SE is currently generating about -0.03 per unit of risk. If you would invest  109.00  in Phonex Inc on December 30, 2024 and sell it today you would earn a total of  27.00  from holding Phonex Inc or generate 24.77% return on investment over 90 days.

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

Phonex Inc  vs.  Delivery Hero SE

Phonex Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Phonex Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Phonex demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Delivery Hero SE

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Phonex and Delivery Hero

The main advantage of trading using opposite Phonex and Delivery Hero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phonex 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 Phonex Inc 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.