Correlation Between Beyond Meat and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Beyond Meat 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 Beyond Meat and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Alibaba Group Holding, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Alibaba Group.
Diversification Opportunities for Beyond Meat and Alibaba Group
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Beyond and Alibaba is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat 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 Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and Alibaba Group go up and down completely randomly.
Pair Corralation between Beyond Meat and Alibaba Group
Assuming the 90 days trading horizon Beyond Meat is expected to under-perform the Alibaba Group. In addition to that, Beyond Meat is 2.02 times more volatile than Alibaba Group Holding. It trades about -0.03 of its total potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.18 per unit of volatility. If you would invest 1,876 in Alibaba Group Holding on November 4, 2024 and sell it today you would earn a total of 192.00 from holding Alibaba Group Holding or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. Alibaba Group Holding
Performance |
| Timeline |
| Beyond Meat |
| Alibaba Group Holding |
Beyond Meat and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and Alibaba Group
The main advantage of trading using opposite Beyond Meat and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.| Beyond Meat vs. Zoom Video Communications | Beyond Meat vs. Charter Communications | Beyond Meat vs. SVB Financial Group | Beyond Meat vs. LPL Financial Holdings |
| Alibaba Group vs. Synchrony Financial | Alibaba Group vs. Teladoc Health | Alibaba Group vs. Healthpeak Properties | Alibaba Group vs. Elevance Health, |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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