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 Holding and Qurate Retail Series, 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
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alibaba and Qurate is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series 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 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 Series 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
Given the investment horizon of 90 days Alibaba Group Holding is expected to under-perform the Qurate Retail. But the stock apears to be less risky and, when comparing its historical volatility, Alibaba Group Holding is 2.22 times less risky than Qurate Retail. The stock trades about -0.23 of its potential returns per unit of risk. The Qurate Retail Series is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 311.00 in Qurate Retail Series on September 1, 2024 and sell it today you would lose (4.00) from holding Qurate Retail Series or give up 1.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Group Holding vs. Qurate Retail Series
Performance |
| Timeline |
| Alibaba Group Holding |
| Qurate Retail Series |
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. PDD Holdings | Alibaba Group vs. MercadoLibre | Alibaba Group vs. JD Inc Adr | Alibaba Group vs. Sea |
| Qurate Retail vs. Qurate Retail | Qurate Retail vs. Newegg Commerce | Qurate Retail vs. Kidpik Corp | Qurate Retail vs. Natural Health Trend |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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