Correlation Between Alibaba Group and Meiwu Technology
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Meiwu Technology 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 Meiwu Technology 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 Meiwu Technology Co, you can compare the effects of market volatilities on Alibaba Group and Meiwu Technology 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 Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Meiwu Technology.
Diversification Opportunities for Alibaba Group and Meiwu Technology
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alibaba and Meiwu is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Alibaba Group i.e., Alibaba Group and Meiwu Technology go up and down completely randomly.
Pair Corralation between Alibaba Group and Meiwu Technology
Given the investment horizon of 90 days Alibaba Group Holding is expected to generate 0.26 times more return on investment than Meiwu Technology. However, Alibaba Group Holding is 3.78 times less risky than Meiwu Technology. It trades about 0.01 of its potential returns per unit of risk. Meiwu Technology Co is currently generating about -0.02 per unit of risk. If you would invest 8,857 in Alibaba Group Holding on August 25, 2024 and sell it today you would lose (544.00) from holding Alibaba Group Holding or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alibaba Group Holding vs. Meiwu Technology Co
Performance |
| Timeline |
| Alibaba Group Holding |
| Meiwu Technology |
Alibaba Group and Meiwu Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and Meiwu Technology
The main advantage of trading using opposite Alibaba Group and Meiwu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Meiwu Technology 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 Meiwu Technology will offset losses from the drop in Meiwu Technology's long position.| Alibaba Group vs. Sea | Alibaba Group vs. Wayfair | Alibaba Group vs. Chewy Inc | Alibaba Group vs. Vipshop Holdings Limited |
| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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