Correlation Between MEITUAN UNSPADR2B and Zalando SE
Can any of the company-specific risk be diversified away by investing in both MEITUAN UNSPADR2B and Zalando SE 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 MEITUAN UNSPADR2B and Zalando SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEITUAN UNSPADR2B and Zalando SE, you can compare the effects of market volatilities on MEITUAN UNSPADR2B and Zalando SE 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 MEITUAN UNSPADR2B with a short position of Zalando SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITUAN UNSPADR2B and Zalando SE.
Diversification Opportunities for MEITUAN UNSPADR2B and Zalando SE
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MEITUAN and Zalando is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MEITUAN UNSPADR2B and Zalando SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zalando SE and MEITUAN UNSPADR2B 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 MEITUAN UNSPADR2B are associated (or correlated) with Zalando SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zalando SE has no effect on the direction of MEITUAN UNSPADR2B i.e., MEITUAN UNSPADR2B and Zalando SE go up and down completely randomly.
Pair Corralation between MEITUAN UNSPADR2B and Zalando SE
Assuming the 90 days trading horizon MEITUAN UNSPADR2B is expected to under-perform the Zalando SE. In addition to that, MEITUAN UNSPADR2B is 1.39 times more volatile than Zalando SE. It trades about -0.09 of its total potential returns per unit of risk. Zalando SE is currently generating about -0.01 per unit of volatility. If you would invest 2,903 in Zalando SE on August 29, 2024 and sell it today you would lose (43.00) from holding Zalando SE or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEITUAN UNSPADR2B vs. Zalando SE
Performance |
| Timeline |
| MEITUAN UNSPADR2B |
| Zalando SE |
MEITUAN UNSPADR2B and Zalando SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITUAN UNSPADR2B and Zalando SE
The main advantage of trading using opposite MEITUAN UNSPADR2B and Zalando SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITUAN UNSPADR2B position performs unexpectedly, Zalando SE 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 Zalando SE will offset losses from the drop in Zalando SE's long position.| MEITUAN UNSPADR2B vs. Mitsubishi Materials | MEITUAN UNSPADR2B vs. Hyster Yale Materials Handling | MEITUAN UNSPADR2B vs. Entravision Communications | MEITUAN UNSPADR2B vs. Plastic Omnium |
| Zalando SE vs. ALTAIR RES INC | Zalando SE vs. RYU Apparel | Zalando SE vs. MYFAIR GOLD P | Zalando SE vs. HF SINCLAIR P |
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 the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |