Correlation Between Zalando SE and Carlson Investments
Can any of the company-specific risk be diversified away by investing in both Zalando SE and Carlson Investments 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 Carlson Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zalando SE and Carlson Investments SA, you can compare the effects of market volatilities on Zalando SE and Carlson Investments 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 Carlson Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zalando SE and Carlson Investments.
Diversification Opportunities for Zalando SE and Carlson Investments
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zalando and Carlson is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Zalando SE and Carlson Investments SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlson Investments 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 Carlson Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlson Investments has no effect on the direction of Zalando SE i.e., Zalando SE and Carlson Investments go up and down completely randomly.
Pair Corralation between Zalando SE and Carlson Investments
Assuming the 90 days trading horizon Zalando SE is expected to generate 0.52 times more return on investment than Carlson Investments. However, Zalando SE is 1.91 times less risky than Carlson Investments. It trades about 0.04 of its potential returns per unit of risk. Carlson Investments SA is currently generating about -0.06 per unit of risk. If you would invest 12,000 in Zalando SE on September 12, 2024 and sell it today you would earn a total of 2,740 from holding Zalando SE or generate 22.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zalando SE vs. Carlson Investments SA
Performance |
| Timeline |
| Zalando SE |
| Carlson Investments |
Zalando SE and Carlson Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zalando SE and Carlson Investments
The main advantage of trading using opposite Zalando SE and Carlson Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zalando SE position performs unexpectedly, Carlson Investments 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 Carlson Investments will offset losses from the drop in Carlson Investments' long position.| Zalando SE vs. Carlson Investments SA | Zalando SE vs. UF Games SA | Zalando SE vs. TEN SQUARE GAMES | Zalando SE vs. 3R Games SA |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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