Correlation Between Disney and ALIBABA
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By analyzing existing cross correlation between Walt Disney and ALIBABA GROUP HLDG, you can compare the effects of market volatilities on Disney and ALIBABA 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 Disney with a short position of ALIBABA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and ALIBABA.
Diversification Opportunities for Disney and ALIBABA
Excellent diversification
The 3 months correlation between Disney and ALIBABA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and ALIBABA GROUP HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIBABA GROUP HLDG and Disney 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 Walt Disney are associated (or correlated) with ALIBABA. 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 HLDG has no effect on the direction of Disney i.e., Disney and ALIBABA go up and down completely randomly.
Pair Corralation between Disney and ALIBABA
Considering the 90-day investment horizon Walt Disney is expected to generate 1.52 times more return on investment than ALIBABA. However, Disney is 1.52 times more volatile than ALIBABA GROUP HLDG. It trades about 0.48 of its potential returns per unit of risk. ALIBABA GROUP HLDG is currently generating about -0.01 per unit of risk. If you would invest 9,540 in Walt Disney on August 25, 2024 and sell it today you would earn a total of 2,025 from holding Walt Disney or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Walt Disney vs. ALIBABA GROUP HLDG
Performance |
| Timeline |
| Walt Disney |
| ALIBABA GROUP HLDG |
Disney and ALIBABA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and ALIBABA
The main advantage of trading using opposite Disney and ALIBABA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney position performs unexpectedly, ALIBABA 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 will offset losses from the drop in ALIBABA's long position.| Disney vs. Roku Inc | Disney vs. AMC Entertainment Holdings | Disney vs. Paramount Global Class | Disney vs. Warner Bros Discovery |
| ALIBABA vs. Boston Beer | ALIBABA vs. Vita Coco | ALIBABA vs. Teleflex Incorporated | ALIBABA vs. Japan Tobacco ADR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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