Correlation Between HelloFresh and Dominos Pizza

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

By analyzing existing cross correlation between HelloFresh SE and Dominos Pizza Group, you can compare the effects of market volatilities on HelloFresh and Dominos Pizza 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 Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of HelloFresh and Dominos Pizza.

Diversification Opportunities for HelloFresh and Dominos Pizza

0.12

Correlation Coefficient

HelloFresh  Dominos Pizza

Average diversification

The 3 months correlation between HelloFresh and Dominos is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding HelloFresh SE and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Group 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 Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of HelloFresh i.e., HelloFresh and Dominos Pizza go up and down completely randomly.

Pair Corralation between HelloFresh and Dominos Pizza

If you would invest  798.00  in HelloFresh SE on September 1, 2024 and sell it today you would earn a total of  402.00  from holding HelloFresh SE or generate 50.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

HelloFresh SE  vs.  Dominos Pizza Group

HelloFresh SE

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HelloFresh SE are ranked lower than 10 (%) 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.

Dominos Pizza Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dominos Pizza Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dominos Pizza is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with HelloFresh and Dominos Pizza

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

The idea behind HelloFresh SE and Dominos Pizza Group 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.