Correlation Between ZALANDO SE and Boohoo PLC
Can any of the company-specific risk be diversified away by investing in both ZALANDO SE and Boohoo 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 Boohoo PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZALANDO SE ADR and BoohooCom PLC ADR, you can compare the effects of market volatilities on ZALANDO SE and Boohoo 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 Boohoo PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZALANDO SE and Boohoo PLC.
Diversification Opportunities for ZALANDO SE and Boohoo PLC
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZALANDO and Boohoo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding ZALANDO SE ADR and BoohooCom PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BoohooCom PLC ADR 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 ADR are associated (or correlated) with Boohoo PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BoohooCom PLC ADR has no effect on the direction of ZALANDO SE i.e., ZALANDO SE and Boohoo PLC go up and down completely randomly.
Pair Corralation between ZALANDO SE and Boohoo PLC
Assuming the 90 days horizon ZALANDO SE ADR is expected to under-perform the Boohoo PLC. In addition to that, ZALANDO SE is 1.53 times more volatile than BoohooCom PLC ADR. It trades about -0.02 of its total potential returns per unit of risk. BoohooCom PLC ADR is currently generating about 0.21 per unit of volatility. 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 |
ZALANDO SE ADR vs. BoohooCom PLC ADR
Performance |
| Timeline |
| ZALANDO SE ADR |
| BoohooCom PLC ADR |
ZALANDO SE and Boohoo PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZALANDO SE and Boohoo PLC
The main advantage of trading using opposite ZALANDO SE and Boohoo PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZALANDO SE position performs unexpectedly, Boohoo 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 Boohoo PLC will offset losses from the drop in Boohoo PLC's long position.| ZALANDO SE vs. ASOS Plc | ZALANDO SE vs. BoohooCom PLC ADR | ZALANDO SE vs. Allegroeu SA | ZALANDO SE vs. AKA Brands Holding |
| Boohoo PLC vs. 1StdibsCom | Boohoo PLC vs. Natural Health Trend | Boohoo PLC vs. Hour Loop | Boohoo PLC vs. Liquidity Services |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |