Correlation Between Alibaba Group and Hoteles City
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Hoteles City 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 Hoteles City 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 Hoteles City Express, you can compare the effects of market volatilities on Alibaba Group and Hoteles City 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 Hoteles City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Hoteles City.
Diversification Opportunities for Alibaba Group and Hoteles City
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alibaba and Hoteles is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Hoteles City Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoteles City Express 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 Hoteles City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoteles City Express has no effect on the direction of Alibaba Group i.e., Alibaba Group and Hoteles City go up and down completely randomly.
Pair Corralation between Alibaba Group and Hoteles City
Assuming the 90 days trading horizon Alibaba Group Holding is expected to under-perform the Hoteles City. But the stock apears to be less risky and, when comparing its historical volatility, Alibaba Group Holding is 1.01 times less risky than Hoteles City. The stock trades about -0.26 of its potential returns per unit of risk. The Hoteles City Express is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Hoteles City Express on August 30, 2024 and sell it today you would lose (11.00) from holding Hoteles City Express or give up 2.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Group Holding vs. Hoteles City Express
Performance |
| Timeline |
| Alibaba Group Holding |
| Hoteles City Express |
Alibaba Group and Hoteles City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and Hoteles City
The main advantage of trading using opposite Alibaba Group and Hoteles City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Hoteles City 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 Hoteles City will offset losses from the drop in Hoteles City's long position.| Alibaba Group vs. Monster Beverage Corp | Alibaba Group vs. The Bank of | Alibaba Group vs. Southwest Airlines | Alibaba Group vs. Martin Marietta Materials |
| Hoteles City vs. Samsung Electronics Co | Hoteles City vs. Berkshire Hathaway | Hoteles City vs. Banco Actinver SA | Hoteles City vs. Baidu Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |