Correlation Between Gold Road and Alibaba Health
Can any of the company-specific risk be diversified away by investing in both Gold Road and Alibaba Health 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 Gold Road and Alibaba Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and Alibaba Health Information, you can compare the effects of market volatilities on Gold Road and Alibaba Health 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 Gold Road with a short position of Alibaba Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Alibaba Health.
Diversification Opportunities for Gold Road and Alibaba Health
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gold and Alibaba is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Alibaba Health Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Health Infor and Gold Road 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 Gold Road Resources are associated (or correlated) with Alibaba Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Health Infor has no effect on the direction of Gold Road i.e., Gold Road and Alibaba Health go up and down completely randomly.
Pair Corralation between Gold Road and Alibaba Health
Assuming the 90 days horizon Gold Road Resources is expected to generate 0.57 times more return on investment than Alibaba Health. However, Gold Road Resources is 1.76 times less risky than Alibaba Health. It trades about 0.44 of its potential returns per unit of risk. Alibaba Health Information is currently generating about 0.16 per unit of risk. If you would invest 126.00 in Gold Road Resources on November 5, 2024 and sell it today you would earn a total of 22.00 from holding Gold Road Resources or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Road Resources vs. Alibaba Health Information
Performance |
| Timeline |
| Gold Road Resources |
| Alibaba Health Infor |
Gold Road and Alibaba Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Alibaba Health
The main advantage of trading using opposite Gold Road and Alibaba Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road position performs unexpectedly, Alibaba Health 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 Health will offset losses from the drop in Alibaba Health's long position.| Gold Road vs. ZIJIN MINH UNSPADR20 | Gold Road vs. Newmont | Gold Road vs. Barrick Gold | Gold Road vs. Franco Nevada |
| Alibaba Health vs. Moneysupermarket Group PLC | Alibaba Health vs. 24SEVENOFFICE GROUP AB | Alibaba Health vs. Corporate Office Properties | Alibaba Health vs. Fevertree Drinks PLC |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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