Correlation Between Hugo Boss and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Hugo Boss 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 Hugo Boss and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hugo Boss AG and Alibaba Group Holdings, you can compare the effects of market volatilities on Hugo Boss 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 Hugo Boss with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hugo Boss and Alibaba Group.
Diversification Opportunities for Hugo Boss and Alibaba Group
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hugo and Alibaba is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hugo Boss AG and Alibaba Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holdings and Hugo Boss 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 Hugo Boss AG 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 Holdings has no effect on the direction of Hugo Boss i.e., Hugo Boss and Alibaba Group go up and down completely randomly.
Pair Corralation between Hugo Boss and Alibaba Group
Assuming the 90 days trading horizon Hugo Boss AG is expected to under-perform the Alibaba Group. In addition to that, Hugo Boss is 1.37 times more volatile than Alibaba Group Holdings. It trades about -0.03 of its total potential returns per unit of risk. Alibaba Group Holdings is currently generating about 0.17 per unit of volatility. If you would invest 6,580 in Alibaba Group Holdings on January 25, 2024 and sell it today you would earn a total of 390.00 from holding Alibaba Group Holdings or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hugo Boss AG vs. Alibaba Group Holdings
Performance |
| Timeline |
| Hugo Boss AG |
| Alibaba Group Holdings |
Hugo Boss and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hugo Boss and Alibaba Group
The main advantage of trading using opposite Hugo Boss and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hugo Boss 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.| Hugo Boss vs. Merit Medical Systems | Hugo Boss vs. Citic Telecom International | Hugo Boss vs. SBA Communications Corp | Hugo Boss vs. XTANT MEDICAL HLDGS |
| Alibaba Group vs. Amazon Inc | Alibaba Group vs. Amazon Inc | Alibaba Group vs. MEITUAN UNSPADR2B | Alibaba Group vs. JD Inc Adr |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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