Correlation Between Alibaba Group and DWS

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Can any of the company-specific risk be diversified away by investing in both Alibaba Group and DWS 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 Alibaba Group and DWS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alibaba Group Holding and DWS, you can compare the effects of market volatilities on Alibaba Group and DWS 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 Alibaba Group with a short position of DWS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and DWS.

Diversification Opportunities for Alibaba Group and DWS

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Alibaba Group and DWS

If you would invest (100.00) in DWS on December 29, 2023 and sell it today you would earn a total of  100.00  from holding DWS or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Alibaba Group Holding  vs.  DWS

 Performance 
       Timeline  
Alibaba Group Holding 

Risk-Adjusted Performance

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Over the last 90 days Alibaba Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
DWS 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days DWS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, DWS is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Alibaba Group and DWS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alibaba Group and DWS

The main advantage of trading using opposite Alibaba Group and DWS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, DWS 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 DWS will offset losses from the drop in DWS's long position.
The idea behind Alibaba Group Holding and DWS 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.
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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