Correlation Between Amedica WT and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Amedica WT and Alibaba Group 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 Amedica WT and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedica WT and Alibaba Group Holding, you can compare the effects of market volatilities on Amedica WT and Alibaba Group 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 Amedica WT with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedica WT and Alibaba Group.
Diversification Opportunities for Amedica WT and Alibaba Group
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amedica and Alibaba is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Amedica WT and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding and Amedica WT 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 Amedica WT are associated (or correlated) with Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Amedica WT i.e., Amedica WT and Alibaba Group go up and down completely randomly.
Pair Corralation between Amedica WT and Alibaba Group
Assuming the 90 days horizon Amedica WT is expected to generate 29.23 times more return on investment than Alibaba Group. However, Amedica WT is 29.23 times more volatile than Alibaba Group Holding. It trades about 0.18 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about -0.01 per unit of risk. If you would invest 1.50 in Amedica WT on January 24, 2024 and sell it today you would lose (1.46) from holding Amedica WT or give up 97.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 11.52% |
| Values | Daily Returns |
Amedica WT vs. Alibaba Group Holding
Performance |
| Timeline |
| Amedica WT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alibaba Group Holding |
Amedica WT and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedica WT and Alibaba Group
The main advantage of trading using opposite Amedica WT and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedica WT position performs unexpectedly, Alibaba Group 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 Alibaba Group will offset losses from the drop in Alibaba Group's long position.| Amedica WT vs. Acco Brands | Amedica WT vs. Scholastic | Amedica WT vs. 51Talk Online Education | Amedica WT vs. Gfl Environmental Holdings |
| Alibaba Group vs. Appian Corp | Alibaba Group vs. Okta Inc | Alibaba Group vs. MongoDB | Alibaba Group vs. Twilio Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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