Correlation Between Boohoo PLC and Allegroeu

Can any of the company-specific risk be diversified away by investing in both Boohoo PLC and Allegroeu 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 Boohoo PLC and Allegroeu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BoohooCom PLC ADR and Allegroeu SA, you can compare the effects of market volatilities on Boohoo PLC and Allegroeu 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 Boohoo PLC with a short position of Allegroeu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boohoo PLC and Allegroeu.

Diversification Opportunities for Boohoo PLC and Allegroeu

0.0

Correlation Coefficient

Boohoo PLC  Allegroeu

Pay attention - limited upside

The 3 months correlation between Boohoo and Allegroeu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BoohooCom PLC ADR and Allegroeu SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegroeu SA and Boohoo PLC 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 BoohooCom PLC ADR are associated (or correlated) with Allegroeu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegroeu SA has no effect on the direction of Boohoo PLC i.e., Boohoo PLC and Allegroeu go up and down completely randomly.

Pair Corralation between Boohoo PLC and Allegroeu

If you would invest  712.00  in BoohooCom PLC ADR on September 11, 2024 and sell it today you would earn a total of  109.00  from holding BoohooCom PLC ADR or generate 15.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

BoohooCom PLC ADR  vs.  Allegroeu SA

BoohooCom PLC ADR

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BoohooCom PLC ADR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Boohoo PLC showed solid returns over the last few months and may actually be approaching a breakup point.

Allegroeu SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allegroeu SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Allegroeu is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Boohoo PLC and Allegroeu

The main advantage of trading using opposite Boohoo PLC and Allegroeu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boohoo PLC position performs unexpectedly, Allegroeu 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 Allegroeu will offset losses from the drop in Allegroeu's long position.

The idea behind BoohooCom PLC ADR and Allegroeu SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.