Correlation Between PICKN PAY and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both PICKN PAY 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 PICKN PAY and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and Alibaba Group Holding, you can compare the effects of market volatilities on PICKN PAY 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 PICKN PAY with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Alibaba Group.
Diversification Opportunities for PICKN PAY and Alibaba Group
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PICKN and Alibaba is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES 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 PICKN PAY 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 PICKN PAY STORES 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 PICKN PAY i.e., PICKN PAY and Alibaba Group go up and down completely randomly.
Pair Corralation between PICKN PAY and Alibaba Group
Assuming the 90 days trading horizon PICKN PAY is expected to generate 1.11 times less return on investment than Alibaba Group. In addition to that, PICKN PAY is 1.37 times more volatile than Alibaba Group Holding. It trades about 0.01 of its total potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.02 per unit of volatility. If you would invest 1,019 in Alibaba Group Holding on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Alibaba Group Holding or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. Alibaba Group Holding
Performance |
| Timeline |
| PICKN PAY STORES |
| Alibaba Group Holding |
PICKN PAY and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and Alibaba Group
The main advantage of trading using opposite PICKN PAY and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY 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.The idea behind PICKN PAY STORES and Alibaba Group Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Alibaba Group vs. Consolidated Communications Holdings | Alibaba Group vs. Spirent Communications plc | Alibaba Group vs. PICKN PAY STORES | Alibaba Group vs. Shenandoah Telecommunications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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