Correlation Between Boohoo PLC and ZALANDO SE
Can any of the company-specific risk be diversified away by investing in both Boohoo PLC 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 Boohoo PLC and ZALANDO SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BoohooCom PLC ADR and ZALANDO SE ADR, you can compare the effects of market volatilities on Boohoo PLC 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 Boohoo PLC with a short position of ZALANDO SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boohoo PLC and ZALANDO SE.
Diversification Opportunities for Boohoo PLC and ZALANDO SE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Boohoo and ZALANDO is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BoohooCom PLC ADR and ZALANDO SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZALANDO SE ADR and Boohoo PLC 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 BoohooCom PLC ADR 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 ADR has no effect on the direction of Boohoo PLC i.e., Boohoo PLC and ZALANDO SE go up and down completely randomly.
Pair Corralation between Boohoo PLC and ZALANDO SE
Assuming the 90 days horizon BoohooCom PLC ADR is expected to generate 0.65 times more return on investment than ZALANDO SE. However, BoohooCom PLC ADR is 1.53 times less risky than ZALANDO SE. It trades about 0.21 of its potential returns per unit of risk. ZALANDO SE ADR is currently generating about -0.02 per unit of risk. If you would invest 712.00 in BoohooCom PLC ADR on August 29, 2024 and sell it today you would earn a total of 56.00 from holding BoohooCom PLC ADR or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BoohooCom PLC ADR vs. ZALANDO SE ADR
Performance |
| Timeline |
| BoohooCom PLC ADR |
| ZALANDO SE ADR |
Boohoo PLC and ZALANDO SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boohoo PLC and ZALANDO SE
The main advantage of trading using opposite Boohoo PLC and ZALANDO SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boohoo PLC 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.| Boohoo PLC vs. 1StdibsCom | Boohoo PLC vs. Natural Health Trend | Boohoo PLC vs. Hour Loop | Boohoo PLC vs. Liquidity Services |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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