Correlation Between Alibaba Group and IRSA Inversiones
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and IRSA Inversiones 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 IRSA Inversiones 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 IRSA Inversiones y, you can compare the effects of market volatilities on Alibaba Group and IRSA Inversiones 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 IRSA Inversiones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and IRSA Inversiones.
Diversification Opportunities for Alibaba Group and IRSA Inversiones
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alibaba and IRSA is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and IRSA Inversiones y in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRSA Inversiones y 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 IRSA Inversiones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRSA Inversiones y has no effect on the direction of Alibaba Group i.e., Alibaba Group and IRSA Inversiones go up and down completely randomly.
Pair Corralation between Alibaba Group and IRSA Inversiones
Assuming the 90 days trading horizon Alibaba Group Holding is expected to generate 0.89 times more return on investment than IRSA Inversiones. However, Alibaba Group Holding is 1.12 times less risky than IRSA Inversiones. It trades about 0.41 of its potential returns per unit of risk. IRSA Inversiones y is currently generating about -0.02 per unit of risk. If you would invest 1,107,500 in Alibaba Group Holding on November 2, 2024 and sell it today you would earn a total of 245,000 from holding Alibaba Group Holding or generate 22.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alibaba Group Holding vs. IRSA Inversiones y
Performance |
| Timeline |
| Alibaba Group Holding |
| IRSA Inversiones y |
Alibaba Group and IRSA Inversiones Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and IRSA Inversiones
The main advantage of trading using opposite Alibaba Group and IRSA Inversiones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, IRSA Inversiones 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 IRSA Inversiones will offset losses from the drop in IRSA Inversiones' long position.| Alibaba Group vs. Transportadora de Gas | Alibaba Group vs. Harmony Gold Mining | Alibaba Group vs. Compania de Transporte |
| IRSA Inversiones vs. Agrometal SAI | IRSA Inversiones vs. Harmony Gold Mining | IRSA Inversiones vs. Telecom Argentina | IRSA Inversiones vs. United States Steel |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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