Correlation Between Capex SA and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Capex SA and Alibaba Group 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 Capex SA and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capex SA and Alibaba Group Holding, you can compare the effects of market volatilities on Capex SA and Alibaba Group 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 Capex SA with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capex SA and Alibaba Group.
Diversification Opportunities for Capex SA and Alibaba Group
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capex and Alibaba is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Capex SA and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding and Capex SA 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 Capex SA are associated (or correlated) with Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Capex SA i.e., Capex SA and Alibaba Group go up and down completely randomly.
Pair Corralation between Capex SA and Alibaba Group
Assuming the 90 days trading horizon Capex SA is expected to generate 1.22 times more return on investment than Alibaba Group. However, Capex SA is 1.22 times more volatile than Alibaba Group Holding. It trades about 0.15 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.09 per unit of risk. If you would invest 77,900 in Capex SA on September 23, 2024 and sell it today you would earn a total of 797,100 from holding Capex SA or generate 1023.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capex SA vs. Alibaba Group Holding
Performance |
| Timeline |
| Capex SA |
| Alibaba Group Holding |
Capex SA and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capex SA and Alibaba Group
The main advantage of trading using opposite Capex SA and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capex SA position performs unexpectedly, Alibaba Group 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 Alibaba Group will offset losses from the drop in Alibaba Group's long position.| Capex SA vs. Inversora Juramento SA | Capex SA vs. YPF SA D | Capex SA vs. Compania de Transporte | Capex SA vs. Carboclor |
| Alibaba Group vs. Agrometal SAI | Alibaba Group vs. Grupo Financiero Galicia | Alibaba Group vs. Pampa Energia SA | Alibaba Group vs. Capex SA |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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