Correlation Between Alibaba Group and ViroGates
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and ViroGates 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 ViroGates 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 ViroGates AS, you can compare the effects of market volatilities on Alibaba Group and ViroGates 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 ViroGates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and ViroGates.
Diversification Opportunities for Alibaba Group and ViroGates
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alibaba and ViroGates is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and ViroGates AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViroGates 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 ViroGates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViroGates AS has no effect on the direction of Alibaba Group i.e., Alibaba Group and ViroGates go up and down completely randomly.
Pair Corralation between Alibaba Group and ViroGates
Given the investment horizon of 90 days Alibaba Group Holding is expected to generate 0.29 times more return on investment than ViroGates. However, Alibaba Group Holding is 3.43 times less risky than ViroGates. It trades about -0.23 of its potential returns per unit of risk. ViroGates AS is currently generating about -0.3 per unit of risk. If you would invest 7,418 in Alibaba Group Holding on January 20, 2024 and sell it today you would lose (530.00) from holding Alibaba Group Holding or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Alibaba Group Holding vs. ViroGates AS
Performance |
| Timeline |
| Alibaba Group Holding |
| ViroGates AS |
Alibaba Group and ViroGates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and ViroGates
The main advantage of trading using opposite Alibaba Group and ViroGates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, ViroGates 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 ViroGates will offset losses from the drop in ViroGates' long position.| Alibaba Group vs. Shoe Carnival | Alibaba Group vs. Hibbett Sports | Alibaba Group vs. Citi Trends | Alibaba Group vs. Zumiez Inc |
| ViroGates vs. Bavarian Nordic | ViroGates vs. Genmab AS | ViroGates vs. GN Store Nord | ViroGates vs. DSV Panalpina AS |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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