Correlation Between Alibaba Group and 1StdibsCom
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and 1StdibsCom 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 1StdibsCom 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 1StdibsCom, you can compare the effects of market volatilities on Alibaba Group and 1StdibsCom 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 1StdibsCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and 1StdibsCom.
Diversification Opportunities for Alibaba Group and 1StdibsCom
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alibaba and 1StdibsCom is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and 1StdibsCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1StdibsCom 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 1StdibsCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1StdibsCom has no effect on the direction of Alibaba Group i.e., Alibaba Group and 1StdibsCom go up and down completely randomly.
Pair Corralation between Alibaba Group and 1StdibsCom
Assuming the 90 days horizon Alibaba Group Holding is expected to generate 0.84 times more return on investment than 1StdibsCom. However, Alibaba Group Holding is 1.19 times less risky than 1StdibsCom. It trades about 0.13 of its potential returns per unit of risk. 1StdibsCom is currently generating about -0.1 per unit of risk. If you would invest 890.00 in Alibaba Group Holding on January 30, 2024 and sell it today you would earn a total of 52.00 from holding Alibaba Group Holding or generate 5.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Alibaba Group Holding vs. 1StdibsCom
Performance |
Timeline |
Alibaba Group Holding |
1StdibsCom |
Alibaba Group and 1StdibsCom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alibaba Group and 1StdibsCom
The main advantage of trading using opposite Alibaba Group and 1StdibsCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, 1StdibsCom 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 1StdibsCom will offset losses from the drop in 1StdibsCom's long position.Alibaba Group vs. AKA Brands Holding | Alibaba Group vs. Hour Loop | Alibaba Group vs. Etsy Inc | Alibaba Group vs. Chewy Inc |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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