Correlation Between Alibaba Group and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Hartford Financial 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 Hartford Financial 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 The Hartford Financial, you can compare the effects of market volatilities on Alibaba Group and Hartford Financial 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 Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Hartford Financial.
Diversification Opportunities for Alibaba Group and Hartford Financial
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alibaba and Hartford is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and The Hartford Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Financial 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 Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Financial has no effect on the direction of Alibaba Group i.e., Alibaba Group and Hartford Financial go up and down completely randomly.
Pair Corralation between Alibaba Group and Hartford Financial
If you would invest 51,980 in The Hartford Financial on October 25, 2024 and sell it today you would earn a total of 0.00 from holding The Hartford Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Group Holding vs. The Hartford Financial
Performance |
| Timeline |
| Alibaba Group Holding |
| The Hartford Financial |
Alibaba Group and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and Hartford Financial
The main advantage of trading using opposite Alibaba Group and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| Alibaba Group vs. CVS Health | Alibaba Group vs. Cardinal Health, | Alibaba Group vs. Beyond Meat | Alibaba Group vs. Teladoc Health |
| Hartford Financial vs. Agilent Technologies | Hartford Financial vs. Teladoc Health | Hartford Financial vs. Clover Health Investments, | Hartford Financial vs. Paycom Software |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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