Correlation Between ZALANDO SE and Galaxy Entertainment
Can any of the company-specific risk be diversified away by investing in both ZALANDO SE and Galaxy Entertainment 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 Galaxy Entertainment 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 Galaxy Entertainment Group, you can compare the effects of market volatilities on ZALANDO SE and Galaxy Entertainment 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 Galaxy Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZALANDO SE and Galaxy Entertainment.
Diversification Opportunities for ZALANDO SE and Galaxy Entertainment
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZALANDO and Galaxy is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding ZALANDO SE ADR and Galaxy Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galaxy Entertainment 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 Galaxy Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galaxy Entertainment has no effect on the direction of ZALANDO SE i.e., ZALANDO SE and Galaxy Entertainment go up and down completely randomly.
Pair Corralation between ZALANDO SE and Galaxy Entertainment
Assuming the 90 days horizon ZALANDO SE ADR is expected to generate 0.55 times more return on investment than Galaxy Entertainment. However, ZALANDO SE ADR is 1.82 times less risky than Galaxy Entertainment. It trades about -0.09 of its potential returns per unit of risk. Galaxy Entertainment Group is currently generating about -0.08 per unit of risk. If you would invest 1,649 in ZALANDO SE ADR on August 30, 2024 and sell it today you would lose (142.00) from holding ZALANDO SE ADR or give up 8.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZALANDO SE ADR vs. Galaxy Entertainment Group
Performance |
| Timeline |
| ZALANDO SE ADR |
| Galaxy Entertainment |
ZALANDO SE and Galaxy Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZALANDO SE and Galaxy Entertainment
The main advantage of trading using opposite ZALANDO SE and Galaxy Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZALANDO SE position performs unexpectedly, Galaxy Entertainment 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 Galaxy Entertainment will offset losses from the drop in Galaxy Entertainment'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 |
| Galaxy Entertainment vs. Las Vegas Sands | Galaxy Entertainment vs. MGM Resorts International | Galaxy Entertainment vs. Caesars Entertainment | Galaxy Entertainment vs. Wynn Resorts Limited |
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 Correlations module to find global opportunities by holding instruments from different markets.
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