Correlation Between Match and Hello

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

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

Diversification Opportunities for Match and Hello

0.32

Correlation Coefficient

Match  Hello

Weak diversification

The 3 months correlation between Match and Hello is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Match Group and Hello Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hello Group and Match 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 Match Group are associated (or correlated) with Hello. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hello Group has no effect on the direction of Match i.e., Match and Hello go up and down completely randomly.

Pair Corralation between Match and Hello

Given the investment horizon of 90 days Match Group is expected to under-perform the Hello. But the stock apears to be less risky and, when comparing its historical volatility, Match Group is 1.02 times less risky than Hello. The stock trades about -0.05 of its potential returns per unit of risk. The Hello Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  639.00  in Hello Group on September 3, 2024 and sell it today you would earn a total of  34.00  from holding Hello Group or generate 5.32% return on investment over 90 days.

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

Match Group  vs.  Hello Group

Match Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Match Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Hello Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hello Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Hello may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Match and Hello

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

The idea behind Match Group and Hello 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 Commodity Directory module to find actively traded commodities issued by global exchanges.