Correlation Between Alibaba Group and QURATE RETAIL
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and QURATE RETAIL 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 QURATE RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alibaba Group Holdings and QURATE RETAIL INC, you can compare the effects of market volatilities on Alibaba Group and QURATE RETAIL 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 QURATE RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and QURATE RETAIL.
Diversification Opportunities for Alibaba Group and QURATE RETAIL
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alibaba and QURATE is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holdings and QURATE RETAIL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QURATE RETAIL INC 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 Holdings are associated (or correlated) with QURATE RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QURATE RETAIL INC has no effect on the direction of Alibaba Group i.e., Alibaba Group and QURATE RETAIL go up and down completely randomly.
Pair Corralation between Alibaba Group and QURATE RETAIL
Assuming the 90 days trading horizon Alibaba Group Holdings is expected to generate 0.41 times more return on investment than QURATE RETAIL. However, Alibaba Group Holdings is 2.43 times less risky than QURATE RETAIL. It trades about 0.31 of its potential returns per unit of risk. QURATE RETAIL INC is currently generating about -0.12 per unit of risk. If you would invest 8,270 in Alibaba Group Holdings on November 3, 2024 and sell it today you would earn a total of 1,610 from holding Alibaba Group Holdings or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Group Holdings vs. QURATE RETAIL INC
Performance |
| Timeline |
| Alibaba Group Holdings |
| QURATE RETAIL INC |
Alibaba Group and QURATE RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and QURATE RETAIL
The main advantage of trading using opposite Alibaba Group and QURATE RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, QURATE RETAIL 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 QURATE RETAIL will offset losses from the drop in QURATE RETAIL's long position.| Alibaba Group vs. Tencent Holdings | Alibaba Group vs. Amazon Inc | Alibaba Group vs. Microsoft | Alibaba Group vs. Apple Inc |
| QURATE RETAIL vs. Zijin Mining Group | QURATE RETAIL vs. Perseus Mining Limited | QURATE RETAIL vs. FIREWEED METALS P | QURATE RETAIL vs. Corporate Office Properties |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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