Correlation Between Plus500 and Blue Apron

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Can any of the company-specific risk be diversified away by investing in both Plus500 and Blue Apron 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 Plus500 and Blue Apron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plus500 and Blue Apron Holdings, you can compare the effects of market volatilities on Plus500 and Blue Apron 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 Plus500 with a short position of Blue Apron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plus500 and Blue Apron.

Diversification Opportunities for Plus500 and Blue Apron

-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Plus500 and Blue Apron is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Plus500 and Blue Apron Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Apron Holdings and Plus500 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 Plus500 are associated (or correlated) with Blue Apron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Apron Holdings has no effect on the direction of Plus500 i.e., Plus500 and Blue Apron go up and down completely randomly.

Pair Corralation between Plus500 and Blue Apron

Assuming the 90 days horizon Plus500 is expected to generate 0.37 times more return on investment than Blue Apron. However, Plus500 is 2.69 times less risky than Blue Apron. It trades about 0.22 of its potential returns per unit of risk. Blue Apron Holdings is currently generating about -0.11 per unit of risk. If you would invest  1,783  in Plus500 on May 10, 2022 and sell it today you would earn a total of  175.00  from holding Plus500 or generate 9.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Plus500  vs.  Blue Apron Holdings

 Performance (%) 
       Timeline  
Plus500 
Plus500 Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Plus500 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Plus500 may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Plus500 Price Channel

Blue Apron Holdings 
Blue Apron Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Apron Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Blue Apron may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Blue Apron Price Channel

Plus500 and Blue Apron Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Plus500 and Blue Apron

The main advantage of trading using opposite Plus500 and Blue Apron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plus500 position performs unexpectedly, Blue Apron 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 Blue Apron will offset losses from the drop in Blue Apron's long position.

Plus500

Pair trading matchups for Plus500

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Plus500 as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Plus500's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Plus500's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Plus500.
The idea behind Plus500 and Blue Apron Holdings 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.
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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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