Correlation Between Borussia Dortmund and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Borussia Dortmund 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 Borussia Dortmund and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borussia Dortmund GmbH and Alibaba Group Holdings, you can compare the effects of market volatilities on Borussia Dortmund 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 Borussia Dortmund with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borussia Dortmund and Alibaba Group.
Diversification Opportunities for Borussia Dortmund and Alibaba Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Borussia and Alibaba is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Borussia Dortmund GmbH 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 Borussia Dortmund 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 Borussia Dortmund GmbH 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 Borussia Dortmund i.e., Borussia Dortmund and Alibaba Group go up and down completely randomly.
Pair Corralation between Borussia Dortmund and Alibaba Group
Assuming the 90 days trading horizon Borussia Dortmund GmbH is expected to generate 1.24 times more return on investment than Alibaba Group. However, Borussia Dortmund is 1.24 times more volatile than Alibaba Group Holdings. It trades about 0.11 of its potential returns per unit of risk. Alibaba Group Holdings is currently generating about -0.13 per unit of risk. If you would invest 350.00 in Borussia Dortmund GmbH on January 19, 2024 and sell it today you would earn a total of 13.00 from holding Borussia Dortmund GmbH or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Borussia Dortmund GmbH vs. Alibaba Group Holdings
Performance |
| Timeline |
| Borussia Dortmund GmbH |
| Alibaba Group Holdings |
Borussia Dortmund and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borussia Dortmund and Alibaba Group
The main advantage of trading using opposite Borussia Dortmund and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borussia Dortmund 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.| Borussia Dortmund vs. Perseus Mining Limited | Borussia Dortmund vs. INTER CARS SA | Borussia Dortmund vs. COMMERCIAL VEHICLE | Borussia Dortmund vs. YOOMA WELLNESS INC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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