Correlation Between Mxima Renda and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Mxima Renda 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 Mxima Renda and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mxima Renda Corporativa and Alibaba Group Holding, you can compare the effects of market volatilities on Mxima Renda 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 Mxima Renda with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mxima Renda and Alibaba Group.
Diversification Opportunities for Mxima Renda and Alibaba Group
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mxima and Alibaba is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Mxima Renda Corporativa 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 Mxima Renda 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 Mxima Renda Corporativa 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 Mxima Renda i.e., Mxima Renda and Alibaba Group go up and down completely randomly.
Pair Corralation between Mxima Renda and Alibaba Group
Assuming the 90 days trading horizon Mxima Renda Corporativa is expected to under-perform the Alibaba Group. But the fund apears to be less risky and, when comparing its historical volatility, Mxima Renda Corporativa is 1.03 times less risky than Alibaba Group. The fund trades about -0.05 of its potential returns per unit of risk. The Alibaba Group Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,664 in Alibaba Group Holding on August 30, 2024 and sell it today you would earn a total of 178.00 from holding Alibaba Group Holding or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mxima Renda Corporativa vs. Alibaba Group Holding
Performance |
| Timeline |
| Mxima Renda Corporativa |
| Alibaba Group Holding |
Mxima Renda and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mxima Renda and Alibaba Group
The main advantage of trading using opposite Mxima Renda and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mxima Renda 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.| Mxima Renda vs. Real Estate Investment | Mxima Renda vs. NAVI CRDITO IMOBILIRIO | Mxima Renda vs. LIFE CAPITAL PARTNERS | Mxima Renda vs. Cshg Jhsf Prime |
| Alibaba Group vs. Pinduoduo | Alibaba Group vs. JD Inc | Alibaba Group vs. Sea Limited | Alibaba Group vs. eBay 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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