Correlation Between HEDGE Brasil and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both HEDGE Brasil 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 HEDGE Brasil and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEDGE Brasil Shopping and Alibaba Group Holding, you can compare the effects of market volatilities on HEDGE Brasil 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 HEDGE Brasil with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEDGE Brasil and Alibaba Group.
Diversification Opportunities for HEDGE Brasil and Alibaba Group
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HEDGE and Alibaba is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding HEDGE Brasil Shopping 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 HEDGE Brasil 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 HEDGE Brasil Shopping 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 HEDGE Brasil i.e., HEDGE Brasil and Alibaba Group go up and down completely randomly.
Pair Corralation between HEDGE Brasil and Alibaba Group
Assuming the 90 days trading horizon HEDGE Brasil Shopping is expected to generate 0.24 times more return on investment than Alibaba Group. However, HEDGE Brasil Shopping is 4.19 times less risky than Alibaba Group. It trades about 0.19 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about -0.18 per unit of risk. If you would invest 19,605 in HEDGE Brasil Shopping on August 30, 2024 and sell it today you would earn a total of 495.00 from holding HEDGE Brasil Shopping or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEDGE Brasil Shopping vs. Alibaba Group Holding
Performance |
| Timeline |
| HEDGE Brasil Shopping |
| Alibaba Group Holding |
HEDGE Brasil and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEDGE Brasil and Alibaba Group
The main advantage of trading using opposite HEDGE Brasil and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEDGE Brasil 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.| HEDGE Brasil vs. HEDGE OFFICE INCOME | HEDGE Brasil vs. Real Estate Investment | HEDGE Brasil vs. NAVI CRDITO IMOBILIRIO | HEDGE Brasil vs. LIFE CAPITAL PARTNERS |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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