Correlation Between Rocket Internet and Fastly

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

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

Diversification Opportunities for Rocket Internet and Fastly

0.64

Correlation Coefficient

Rocket Internet  Fastly

Poor diversification

The 3 months correlation between Rocket and Fastly is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Rocket Internet SE and Fastly Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastly Inc and Rocket Internet 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 Rocket Internet SE are associated (or correlated) with Fastly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastly Inc has no effect on the direction of Rocket Internet i.e., Rocket Internet and Fastly go up and down completely randomly.

Pair Corralation between Rocket Internet and Fastly

Assuming the 90 days trading horizon Rocket Internet SE is expected to generate 0.38 times more return on investment than Fastly. However, Rocket Internet SE is 2.62 times less risky than Fastly. It trades about 0.01 of its potential returns per unit of risk. Fastly Inc is currently generating about -0.03 per unit of risk. If you would invest  1,750  in Rocket Internet SE on April 16, 2025 and sell it today you would lose (50.00) from holding Rocket Internet SE or give up 2.86% of portfolio value over 90 days.

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

Rocket Internet SE  vs.  Fastly Inc

Rocket Internet SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rocket Internet SE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Rocket Internet displayed solid returns over the last few months and may actually be approaching a breakup point.

Fastly Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fastly Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Fastly unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rocket Internet and Fastly

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

The idea behind Rocket Internet SE and Fastly Inc 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.