Correlation Between Alibaba Group and Grupo Supervielle
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Grupo Supervielle 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 Grupo Supervielle 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 Grupo Supervielle SA, you can compare the effects of market volatilities on Alibaba Group and Grupo Supervielle 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 Grupo Supervielle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Grupo Supervielle.
Diversification Opportunities for Alibaba Group and Grupo Supervielle
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alibaba and Grupo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Grupo Supervielle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Supervielle 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 Grupo Supervielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Supervielle has no effect on the direction of Alibaba Group i.e., Alibaba Group and Grupo Supervielle go up and down completely randomly.
Pair Corralation between Alibaba Group and Grupo Supervielle
Assuming the 90 days trading horizon Alibaba Group is expected to generate 84.28 times less return on investment than Grupo Supervielle. But when comparing it to its historical volatility, Alibaba Group Holding is 2.57 times less risky than Grupo Supervielle. It trades about 0.02 of its potential returns per unit of risk. Grupo Supervielle SA is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 289,500 in Grupo Supervielle SA on October 14, 2024 and sell it today you would earn a total of 174,500 from holding Grupo Supervielle SA or generate 60.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Group Holding vs. Grupo Supervielle SA
Performance |
| Timeline |
| Alibaba Group Holding |
| Grupo Supervielle |
Alibaba Group and Grupo Supervielle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and Grupo Supervielle
The main advantage of trading using opposite Alibaba Group and Grupo Supervielle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Grupo Supervielle 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 Grupo Supervielle will offset losses from the drop in Grupo Supervielle's long position.| Alibaba Group vs. Pfizer Inc | Alibaba Group vs. Instituto Rosenbusch SA | Alibaba Group vs. Sociedad Comercial del | Alibaba Group vs. Ledesma SAAI |
| Grupo Supervielle vs. Agrometal SAI | Grupo Supervielle vs. Transportadora de Gas | Grupo Supervielle vs. Telecom Argentina | Grupo Supervielle vs. Harmony Gold Mining |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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