Correlation Between Zalando SE and UNIPHAR PLC
Can any of the company-specific risk be diversified away by investing in both Zalando SE and UNIPHAR PLC 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 Zalando SE and UNIPHAR PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zalando SE and UNIPHAR PLC EO, you can compare the effects of market volatilities on Zalando SE and UNIPHAR PLC 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 Zalando SE with a short position of UNIPHAR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zalando SE and UNIPHAR PLC.
Diversification Opportunities for Zalando SE and UNIPHAR PLC
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zalando and UNIPHAR is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Zalando SE and UNIPHAR PLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIPHAR PLC EO and Zalando SE 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 Zalando SE are associated (or correlated) with UNIPHAR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIPHAR PLC EO has no effect on the direction of Zalando SE i.e., Zalando SE and UNIPHAR PLC go up and down completely randomly.
Pair Corralation between Zalando SE and UNIPHAR PLC
Assuming the 90 days horizon Zalando SE is expected to generate 1.06 times more return on investment than UNIPHAR PLC. However, Zalando SE is 1.06 times more volatile than UNIPHAR PLC EO. It trades about -0.02 of its potential returns per unit of risk. UNIPHAR PLC EO is currently generating about -0.2 per unit of risk. If you would invest 2,953 in Zalando SE on August 30, 2024 and sell it today you would lose (93.00) from holding Zalando SE or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Zalando SE vs. UNIPHAR PLC EO
Performance |
| Timeline |
| Zalando SE |
| UNIPHAR PLC EO |
Zalando SE and UNIPHAR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zalando SE and UNIPHAR PLC
The main advantage of trading using opposite Zalando SE and UNIPHAR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zalando SE position performs unexpectedly, UNIPHAR PLC 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 UNIPHAR PLC will offset losses from the drop in UNIPHAR PLC's long position.| Zalando SE vs. MSAD INSURANCE | Zalando SE vs. Singapore Reinsurance | Zalando SE vs. PennantPark Investment | Zalando SE vs. United Insurance Holdings |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |