Correlation Between Alibaba Group and AGF AS

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Can any of the company-specific risk be diversified away by investing in both Alibaba Group and AGF AS 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 AGF AS 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 AGF AS, you can compare the effects of market volatilities on Alibaba Group and AGF AS 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 AGF AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and AGF AS.

Diversification Opportunities for Alibaba Group and AGF AS

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Alibaba and AGF is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and AGF AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGF AS 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 AGF AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGF AS has no effect on the direction of Alibaba Group i.e., Alibaba Group and AGF AS go up and down completely randomly.

Pair Corralation between Alibaba Group and AGF AS

Given the investment horizon of 90 days Alibaba Group Holding is expected to under-perform the AGF AS. In addition to that, Alibaba Group is 1.31 times more volatile than AGF AS. It trades about -0.05 of its total potential returns per unit of risk. AGF AS is currently generating about 0.02 per unit of volatility. If you would invest  63.00  in AGF AS on December 29, 2023 and sell it today you would earn a total of  1.00  from holding AGF AS or generate 1.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.41%
ValuesDaily Returns

Alibaba Group Holding  vs.  AGF AS

 Performance 
       Timeline  
Alibaba Group Holding 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Alibaba Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting 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.
AGF AS 

Risk-Adjusted Performance

5 of 100

 
Low
 
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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in AGF AS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental drivers, AGF AS may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Alibaba Group and AGF AS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alibaba Group and AGF AS

The main advantage of trading using opposite Alibaba Group and AGF AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, AGF AS 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 AGF AS will offset losses from the drop in AGF AS's long position.
The idea behind Alibaba Group Holding and AGF AS 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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