Correlation Between Hello and PDD Holdings

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

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

Diversification Opportunities for Hello and PDD Holdings

-0.74

Correlation Coefficient

Hello  PDD Holdings

Pay attention - limited upside

The 3 months correlation between Hello and PDD is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hello Group and PDD Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PDD Holdings and Hello 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 Hello Group are associated (or correlated) with PDD Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PDD Holdings has no effect on the direction of Hello i.e., Hello and PDD Holdings go up and down completely randomly.

Pair Corralation between Hello and PDD Holdings

Given the investment horizon of 90 days Hello Group is expected to under-perform the PDD Holdings. In addition to that, Hello is 1.07 times more volatile than PDD Holdings. It trades about -0.11 of its total potential returns per unit of risk. PDD Holdings is currently generating about 0.21 per unit of volatility. If you would invest  10,466  in PDD Holdings on June 30, 2025 and sell it today you would earn a total of  2,533  from holding PDD Holdings or generate 24.2% return on investment over 90 days.

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

Hello Group  vs.  PDD Holdings

Hello Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Hello Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

PDD Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PDD Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, PDD Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hello and PDD Holdings

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

The idea behind Hello Group and PDD 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.

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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.