Correlation Between Alibaba Health and Intel
Can any of the company-specific risk be diversified away by investing in both Alibaba Health and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on Alibaba Health and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Health and Intel.
Diversification Opportunities for Alibaba Health and Intel
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alibaba and Intel is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Health Information and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Alibaba Health i.e., Alibaba Health and Intel go up and down completely randomly.
Pair Corralation between Alibaba Health and Intel
Assuming the 90 days horizon Alibaba Health Information is expected to generate 1.14 times more return on investment than Intel. However, Alibaba Health is 1.14 times more volatile than Intel. It trades about 0.16 of its potential returns per unit of risk. Intel is currently generating about 0.0 per unit of risk. If you would invest 40.00 in Alibaba Health Information on November 5, 2024 and sell it today you would earn a total of 4.00 from holding Alibaba Health Information or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alibaba Health Information vs. Intel
Performance |
| Timeline |
| Alibaba Health Infor |
| Intel |
Alibaba Health and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Health and Intel
The main advantage of trading using opposite Alibaba Health and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Health position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Alibaba Health vs. Moneysupermarket Group PLC | Alibaba Health vs. 24SEVENOFFICE GROUP AB | Alibaba Health vs. Corporate Office Properties | Alibaba Health vs. Fevertree Drinks PLC |
| Intel vs. Calibre Mining Corp | Intel vs. East Africa Metals | Intel vs. Citic Telecom International | Intel vs. Verizon Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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