Correlation Between Sendas Distribuidora and Dingdong ADR
Can any of the company-specific risk be diversified away by investing in both Sendas Distribuidora and Dingdong ADR 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 Sendas Distribuidora and Dingdong ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sendas Distribuidora SA and Dingdong ADR, you can compare the effects of market volatilities on Sendas Distribuidora and Dingdong ADR 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 Sendas Distribuidora with a short position of Dingdong ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sendas Distribuidora and Dingdong ADR.
Diversification Opportunities for Sendas Distribuidora and Dingdong ADR
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sendas and Dingdong is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sendas Distribuidora SA and Dingdong ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dingdong ADR and Sendas Distribuidora 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 Sendas Distribuidora SA are associated (or correlated) with Dingdong ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dingdong ADR has no effect on the direction of Sendas Distribuidora i.e., Sendas Distribuidora and Dingdong ADR go up and down completely randomly.
Pair Corralation between Sendas Distribuidora and Dingdong ADR
Given the investment horizon of 90 days Sendas Distribuidora SA is expected to under-perform the Dingdong ADR. But the stock apears to be less risky and, when comparing its historical volatility, Sendas Distribuidora SA is 1.7 times less risky than Dingdong ADR. The stock trades about -0.11 of its potential returns per unit of risk. The Dingdong ADR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 150.00 in Dingdong ADR on September 11, 2024 and sell it today you would earn a total of 318.00 from holding Dingdong ADR or generate 212.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sendas Distribuidora SA vs. Dingdong ADR
Performance |
Timeline |
Sendas Distribuidora |
Dingdong ADR |
Sendas Distribuidora and Dingdong ADR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sendas Distribuidora and Dingdong ADR
The main advantage of trading using opposite Sendas Distribuidora and Dingdong ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sendas Distribuidora position performs unexpectedly, Dingdong ADR 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 Dingdong ADR will offset losses from the drop in Dingdong ADR's long position.Sendas Distribuidora vs. Village Super Market | Sendas Distribuidora vs. Weis Markets | Sendas Distribuidora vs. Ingles Markets Incorporated | Sendas Distribuidora vs. Grocery Outlet Holding |
Dingdong ADR vs. Village Super Market | Dingdong ADR vs. Weis Markets | Dingdong ADR vs. Sendas Distribuidora SA | Dingdong ADR vs. Ingles Markets Incorporated |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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