Correlation Between Alibaba Group and First Republic
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and First Republic 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 First Republic 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 First Republic Bank, you can compare the effects of market volatilities on Alibaba Group and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and First Republic.
Diversification Opportunities for Alibaba Group and First Republic
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alibaba and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Alibaba Group i.e., Alibaba Group and First Republic go up and down completely randomly.
Pair Corralation between Alibaba Group and First Republic
If you would invest 6,095 in First Republic Bank on August 29, 2024 and sell it today you would earn a total of 0.00 from holding First Republic Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Group Holding vs. First Republic Bank
Performance |
| Timeline |
| Alibaba Group Holding |
| First Republic Bank |
Alibaba Group and First Republic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and First Republic
The main advantage of trading using opposite Alibaba Group and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.The idea behind Alibaba Group Holding and First Republic Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| First Republic vs. First Majestic Silver | First Republic vs. Ameriprise Financial | First Republic vs. McEwen Mining | First Republic vs. Lloyds Banking Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |