Correlation Between Agrometal SAI and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Agrometal SAI 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 Agrometal SAI and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agrometal SAI and Alibaba Group Holding, you can compare the effects of market volatilities on Agrometal SAI 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 Agrometal SAI with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agrometal SAI and Alibaba Group.
Diversification Opportunities for Agrometal SAI and Alibaba Group
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agrometal and Alibaba is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Agrometal SAI and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding and Agrometal SAI 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 Agrometal SAI 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 Holding has no effect on the direction of Agrometal SAI i.e., Agrometal SAI and Alibaba Group go up and down completely randomly.
Pair Corralation between Agrometal SAI and Alibaba Group
Assuming the 90 days trading horizon Agrometal SAI is expected to generate 1.89 times more return on investment than Alibaba Group. However, Agrometal SAI is 1.89 times more volatile than Alibaba Group Holding. It trades about 0.06 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.09 per unit of risk. If you would invest 6,420 in Agrometal SAI on August 30, 2024 and sell it today you would earn a total of 630.00 from holding Agrometal SAI or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agrometal SAI vs. Alibaba Group Holding
Performance |
| Timeline |
| Agrometal SAI |
| Alibaba Group Holding |
Agrometal SAI and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agrometal SAI and Alibaba Group
The main advantage of trading using opposite Agrometal SAI and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agrometal SAI 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.| Agrometal SAI vs. Vista Energy, SAB | Agrometal SAI vs. United States Steel | Agrometal SAI vs. Central Puerto SA | Agrometal SAI vs. Pfizer Inc |
| Alibaba Group vs. Harmony Gold Mining | Alibaba Group vs. Telecom Argentina | Alibaba Group vs. Compania de Transporte | Alibaba Group vs. Agrometal SAI |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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