Correlation Between Allegroeu and Zalando SE
Can any of the company-specific risk be diversified away by investing in both Allegroeu 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 Allegroeu and Zalando SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegroeu SA and Zalando SE, you can compare the effects of market volatilities on Allegroeu 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 Allegroeu with a short position of Zalando SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegroeu and Zalando SE.
Diversification Opportunities for Allegroeu and Zalando SE
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allegroeu and Zalando is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Allegroeu SA and Zalando SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zalando SE and Allegroeu 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 Allegroeu SA 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 Allegroeu i.e., Allegroeu and Zalando SE go up and down completely randomly.
Pair Corralation between Allegroeu and Zalando SE
Assuming the 90 days trading horizon Allegroeu is expected to generate 15.29 times less return on investment than Zalando SE. But when comparing it to its historical volatility, Allegroeu SA is 1.32 times less risky than Zalando SE. It trades about 0.0 of its potential returns per unit of risk. Zalando SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9,450 in Zalando SE on September 4, 2024 and sell it today you would earn a total of 2,970 from holding Zalando SE or generate 31.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Allegroeu SA vs. Zalando SE
Performance |
| Timeline |
| Allegroeu SA |
| Zalando SE |
Allegroeu and Zalando SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegroeu and Zalando SE
The main advantage of trading using opposite Allegroeu and Zalando SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegroeu 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.| Allegroeu vs. PZ Cormay SA | Allegroeu vs. TEN SQUARE GAMES | Allegroeu vs. Ultimate Games SA | Allegroeu vs. Varsav Game Studios |
| Zalando SE vs. GreenX Metals | Zalando SE vs. Medicofarma Biotech SA | Zalando SE vs. Varsav Game Studios | Zalando SE vs. Saule Technologies SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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