Correlation Between Alibaba Group and Laboratorio Reig
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Laboratorio Reig 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 Laboratorio Reig 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 Laboratorio Reig Jofre, you can compare the effects of market volatilities on Alibaba Group and Laboratorio Reig 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 Laboratorio Reig. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Laboratorio Reig.
Diversification Opportunities for Alibaba Group and Laboratorio Reig
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alibaba and Laboratorio is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Laboratorio Reig Jofre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laboratorio Reig Jofre 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 Laboratorio Reig. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laboratorio Reig Jofre has no effect on the direction of Alibaba Group i.e., Alibaba Group and Laboratorio Reig go up and down completely randomly.
Pair Corralation between Alibaba Group and Laboratorio Reig
Given the investment horizon of 90 days Alibaba Group Holding is expected to under-perform the Laboratorio Reig. In addition to that, Alibaba Group is 1.32 times more volatile than Laboratorio Reig Jofre. It trades about -0.01 of its total potential returns per unit of risk. Laboratorio Reig Jofre is currently generating about 0.01 per unit of volatility. If you would invest 248.00 in Laboratorio Reig Jofre on January 26, 2024 and sell it today you would earn a total of 4.00 from holding Laboratorio Reig Jofre or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Alibaba Group Holding vs. Laboratorio Reig Jofre
Performance |
| Timeline |
| Alibaba Group Holding |
| Laboratorio Reig Jofre |
Alibaba Group and Laboratorio Reig Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and Laboratorio Reig
The main advantage of trading using opposite Alibaba Group and Laboratorio Reig positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Laboratorio Reig 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 Laboratorio Reig will offset losses from the drop in Laboratorio Reig's long position.| Alibaba Group vs. Sea | Alibaba Group vs. Vipshop Holdings Limited | Alibaba Group vs. Amazon Inc | Alibaba Group vs. JD Inc Adr |
| Laboratorio Reig vs. Laboratorios Farmaceuticos ROVI | Laboratorio Reig vs. Almirall | Laboratorio Reig vs. Pharma Mar SA | Laboratorio Reig vs. Oryzon Genomics SA |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities |