Correlation Between HelloFresh and Noble Romans

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

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

Diversification Opportunities for HelloFresh and Noble Romans

0.02

Correlation Coefficient

HelloFresh  Noble Romans

Significant diversification

The 3 months correlation between HelloFresh and Noble is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding HelloFresh SE and Noble Romans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Romans 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 Noble Romans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Romans has no effect on the direction of HelloFresh i.e., HelloFresh and Noble Romans go up and down completely randomly.

Pair Corralation between HelloFresh and Noble Romans

Assuming the 90 days horizon HelloFresh SE is expected to generate 0.83 times more return on investment than Noble Romans. However, HelloFresh SE is 1.21 times less risky than Noble Romans. It trades about 0.12 of its potential returns per unit of risk. Noble Romans is currently generating about -0.01 per unit of risk. If you would invest  798.00  in HelloFresh SE on September 3, 2024 and sell it today you would earn a total of  356.00  from holding HelloFresh SE or generate 44.61% return on investment over 90 days.

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

HelloFresh SE  vs.  Noble Romans

HelloFresh SE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HelloFresh SE are ranked lower than 9 (%) 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.

Noble Romans

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Noble Romans has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Noble Romans is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with HelloFresh and Noble Romans

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

The idea behind HelloFresh SE and Noble Romans 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..