Correlation Between Urban Outfitters and ALIBABA
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By analyzing existing cross correlation between Urban Outfitters and ALIBABA GROUP HLDG, you can compare the effects of market volatilities on Urban Outfitters and ALIBABA 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 Urban Outfitters with a short position of ALIBABA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urban Outfitters and ALIBABA.
Diversification Opportunities for Urban Outfitters and ALIBABA
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Urban and ALIBABA is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Urban Outfitters and ALIBABA GROUP HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIBABA GROUP HLDG and Urban Outfitters 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 Urban Outfitters are associated (or correlated) with ALIBABA. 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 HLDG has no effect on the direction of Urban Outfitters i.e., Urban Outfitters and ALIBABA go up and down completely randomly.
Pair Corralation between Urban Outfitters and ALIBABA
Given the investment horizon of 90 days Urban Outfitters is expected to generate 6.56 times more return on investment than ALIBABA. However, Urban Outfitters is 6.56 times more volatile than ALIBABA GROUP HLDG. It trades about 0.07 of its potential returns per unit of risk. ALIBABA GROUP HLDG is currently generating about 0.02 per unit of risk. If you would invest 2,649 in Urban Outfitters on November 9, 2024 and sell it today you would earn a total of 3,111 from holding Urban Outfitters or generate 117.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 76.06% |
| Values | Daily Returns |
Urban Outfitters vs. ALIBABA GROUP HLDG
Performance |
| Timeline |
| Urban Outfitters |
| ALIBABA GROUP HLDG |
Urban Outfitters and ALIBABA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Urban Outfitters and ALIBABA
The main advantage of trading using opposite Urban Outfitters and ALIBABA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urban Outfitters position performs unexpectedly, ALIBABA 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 will offset losses from the drop in ALIBABA's long position.| Urban Outfitters vs. American Eagle Outfitters | Urban Outfitters vs. Foot Locker | Urban Outfitters vs. Childrens Place | Urban Outfitters vs. Abercrombie Fitch |
| ALIBABA vs. MGIC Investment Corp | ALIBABA vs. Canaf Investments | ALIBABA vs. Toro Co | ALIBABA vs. Delaware Investments Florida |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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