Correlation Between Global E and ZALANDO SE
Can any of the company-specific risk be diversified away by investing in both Global E 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 Global E and ZALANDO SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and ZALANDO SE ADR, you can compare the effects of market volatilities on Global E 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 Global E with a short position of ZALANDO SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and ZALANDO SE.
Diversification Opportunities for Global E and ZALANDO SE
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and ZALANDO is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online 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 Global E 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 Global E Online 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 Global E i.e., Global E and ZALANDO SE go up and down completely randomly.
Pair Corralation between Global E and ZALANDO SE
Given the investment horizon of 90 days Global E Online is expected to generate 1.16 times more return on investment than ZALANDO SE. However, Global E is 1.16 times more volatile than ZALANDO SE ADR. It trades about 0.07 of its potential returns per unit of risk. ZALANDO SE ADR is currently generating about 0.0 per unit of risk. If you would invest 2,283 in Global E Online on September 3, 2024 and sell it today you would earn a total of 2,945 from holding Global E Online or generate 129.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global E Online vs. ZALANDO SE ADR
Performance |
| Timeline |
| Global E Online |
| ZALANDO SE ADR |
Global E and ZALANDO SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and ZALANDO SE
The main advantage of trading using opposite Global E and ZALANDO SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E 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.| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
| ZALANDO SE vs. ASOS Plc | ZALANDO SE vs. BoohooCom PLC ADR | ZALANDO SE vs. Allegroeu SA | ZALANDO SE vs. AKA Brands Holding |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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