Correlation Between Allegroeu and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Allegroeu 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 Allegroeu and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allegroeu SA and Alibaba Group Holding, you can compare the effects of market volatilities on Allegroeu 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 Allegroeu with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allegroeu and Alibaba Group.
Diversification Opportunities for Allegroeu and Alibaba Group
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allegroeu and Alibaba is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Allegroeu SA 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 Allegroeu 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 Allegroeu SA 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 Allegroeu i.e., Allegroeu and Alibaba Group go up and down completely randomly.
Pair Corralation between Allegroeu and Alibaba Group
Assuming the 90 days horizon Allegroeu is expected to generate 1.23 times less return on investment than Alibaba Group. But when comparing it to its historical volatility, Allegroeu SA is 1.69 times less risky than Alibaba Group. It trades about 0.02 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,230 in Alibaba Group Holding on November 2, 2024 and sell it today you would lose (7.00) from holding Alibaba Group Holding or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allegroeu SA vs. Alibaba Group Holding
Performance |
| Timeline |
| Allegroeu SA |
| Alibaba Group Holding |
Allegroeu and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allegroeu and Alibaba Group
The main advantage of trading using opposite Allegroeu and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allegroeu 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.| Allegroeu vs. Phonex Inc | Allegroeu vs. Delivery Hero SE | Allegroeu vs. 1StdibsCom | Allegroeu vs. Natural Health Trend |
| Alibaba Group vs. Meituan ADR | Alibaba Group vs. Meituan | Alibaba Group vs. Qurate Retail Series | Alibaba Group vs. ThredUp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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