Correlation Between Alibaba Health and Meta Financial
Can any of the company-specific risk be diversified away by investing in both Alibaba Health and Meta Financial 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 Alibaba Health and Meta Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alibaba Health Information and Meta Financial Group, you can compare the effects of market volatilities on Alibaba Health and Meta Financial 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 Alibaba Health with a short position of Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Health and Meta Financial.
Diversification Opportunities for Alibaba Health and Meta Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alibaba and Meta is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Health Information and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group and Alibaba Health 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 Alibaba Health Information are associated (or correlated) with Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of Alibaba Health i.e., Alibaba Health and Meta Financial go up and down completely randomly.
Pair Corralation between Alibaba Health and Meta Financial
Assuming the 90 days horizon Alibaba Health Information is expected to generate 2.14 times more return on investment than Meta Financial. However, Alibaba Health is 2.14 times more volatile than Meta Financial Group. It trades about 0.02 of its potential returns per unit of risk. Meta Financial Group is currently generating about -0.1 per unit of risk. If you would invest 42.00 in Alibaba Health Information on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Alibaba Health Information or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Health Information vs. Meta Financial Group
Performance |
| Timeline |
| Alibaba Health Infor |
| Meta Financial Group |
Alibaba Health and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Health and Meta Financial
The main advantage of trading using opposite Alibaba Health and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Health position performs unexpectedly, Meta Financial 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 Meta Financial will offset losses from the drop in Meta Financial's long position.| Alibaba Health vs. Meta Financial Group | Alibaba Health vs. Direct Line Insurance | Alibaba Health vs. Erste Group Bank | Alibaba Health vs. CDN IMPERIAL BANK |
| Meta Financial vs. Monument Mining Limited | Meta Financial vs. Perseus Mining Limited | Meta Financial vs. Insurance Australia Group | Meta Financial vs. VIENNA INSURANCE GR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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