Correlation Between ZALANDO SE and Hour Loop
Can any of the company-specific risk be diversified away by investing in both ZALANDO SE and Hour Loop 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 Hour Loop 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 Hour Loop, you can compare the effects of market volatilities on ZALANDO SE and Hour Loop 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 Hour Loop. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZALANDO SE and Hour Loop.
Diversification Opportunities for ZALANDO SE and Hour Loop
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZALANDO and Hour is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ZALANDO SE ADR and Hour Loop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hour Loop 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 Hour Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hour Loop has no effect on the direction of ZALANDO SE i.e., ZALANDO SE and Hour Loop go up and down completely randomly.
Pair Corralation between ZALANDO SE and Hour Loop
Assuming the 90 days horizon ZALANDO SE is expected to generate 2.56 times less return on investment than Hour Loop. But when comparing it to its historical volatility, ZALANDO SE ADR is 3.08 times less risky than Hour Loop. It trades about 0.08 of its potential returns per unit of risk. Hour Loop is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Hour Loop on September 1, 2024 and sell it today you would earn a total of 8.00 from holding Hour Loop or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZALANDO SE ADR vs. Hour Loop
Performance |
| Timeline |
| ZALANDO SE ADR |
| Hour Loop |
ZALANDO SE and Hour Loop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZALANDO SE and Hour Loop
The main advantage of trading using opposite ZALANDO SE and Hour Loop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZALANDO SE position performs unexpectedly, Hour Loop 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 Hour Loop will offset losses from the drop in Hour Loop's long position.| ZALANDO SE vs. PDD Holdings | ZALANDO SE vs. JD Inc Adr | ZALANDO SE vs. Baozun Inc | ZALANDO SE vs. Global E Online |
| Hour Loop vs. Qurate Retail Series | Hour Loop vs. iPower Inc | Hour Loop vs. MOGU Inc | Hour Loop vs. Qurate Retail |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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