Correlation Between Alibaba Group and Nordea Invest

By analyzing existing cross correlation between Alibaba Group Holding and Nordea Invest Europe you can compare the effects of market volatilities on Alibaba Group and Nordea Invest 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 Nordea Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Nordea Invest.

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Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Nordea Invest at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing Alibaba Group and Nordea Invest into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for Alibaba Group and Nordea Invest

0.31
Correlation
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NI

Weak diversification

The 3 months correlation between Alibaba and Nordea is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding Limited and Nordea Invest Europe Enhanced in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Nordea Invest Europe 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 Nordea Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordea Invest Europe has no effect on the direction of Alibaba Group i.e. Alibaba Group and Nordea Invest go up and down completely randomly.

Pair Corralation between Alibaba Group and Nordea Invest

Given the investment horizon of 30 days, Alibaba Group Holding is expected to under-perform the Nordea Invest. In addition to that, Alibaba Group is 1.18 times more volatile than Nordea Invest Europe. It trades about -0.01 of its total potential returns per unit of risk. Nordea Invest Europe is currently generating about 0.39 per unit of volatility. If you would invest  8,218  in Nordea Invest Europe on April 29, 2020 and sell it today you would earn a total of  489.00  from holding Nordea Invest Europe or generate 5.95% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy9.68%
ValuesDaily Returns

Alibaba Group Holding Limited  vs.  Nordea Invest Europe Enhanced

 Performance (%) 
      Timeline 
Alibaba Group Holding 
00

Alibaba Group Risk-Adjusted Performance

Over the last 30 days Alibaba Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alibaba Group is not utilizing all of its potentials. The ongoing stock price disturbance, may contribute to short term losses for the investors.
Nordea Invest Europe 
00

Nordea Invest Risk-Adjusted Performance

Over the last 30 days Nordea Invest Europe has generated negative risk-adjusted returns adding no value to investors with long positions. Allthough quite weak forward indicators, Nordea Invest disclosed solid returns over the last few months and may actually be approaching a breakup point.

Alibaba Group and Nordea Invest Volatility Contrast

 Predicted Return Density 
      Returns 
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