Correlation Between Alibaba Group and TBC Bank
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and TBC Bank 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 TBC Bank 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 TBC Bank Group, you can compare the effects of market volatilities on Alibaba Group and TBC Bank 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 TBC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and TBC Bank.
Diversification Opportunities for Alibaba Group and TBC Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alibaba and TBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and TBC Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBC Bank Group 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 TBC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBC Bank Group has no effect on the direction of Alibaba Group i.e., Alibaba Group and TBC Bank go up and down completely randomly.
Pair Corralation between Alibaba Group and TBC Bank
Assuming the 90 days trading horizon Alibaba Group Holding is expected to generate 1.52 times more return on investment than TBC Bank. However, Alibaba Group is 1.52 times more volatile than TBC Bank Group. It trades about 0.11 of its potential returns per unit of risk. TBC Bank Group is currently generating about 0.06 per unit of risk. If you would invest 6,981 in Alibaba Group Holding on November 9, 2024 and sell it today you would earn a total of 2,969 from holding Alibaba Group Holding or generate 42.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 38.01% |
| Values | Daily Returns |
Alibaba Group Holding vs. TBC Bank Group
Performance |
| Timeline |
| Alibaba Group Holding |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| TBC Bank Group |
Alibaba Group and TBC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and TBC Bank
The main advantage of trading using opposite Alibaba Group and TBC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, TBC Bank 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 TBC Bank will offset losses from the drop in TBC Bank's long position.| Alibaba Group vs. Anglo Asian Mining | Alibaba Group vs. Hecla Mining Co | Alibaba Group vs. Fortuna Silver Mines | Alibaba Group vs. Eastinco Mining Exploration |
| TBC Bank vs. Datagroup SE | TBC Bank vs. Norman Broadbent Plc | TBC Bank vs. Teradata Corp | TBC Bank vs. Alliance Data Systems |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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