Correlation Between Visa and ALIBABA
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By analyzing existing cross correlation between Visa Class A and ALIBABA GROUP HLDG, you can compare the effects of market volatilities on Visa 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 Visa with a short position of ALIBABA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and ALIBABA.
Diversification Opportunities for Visa and ALIBABA
Excellent diversification
The 3 months correlation between Visa and ALIBABA is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A 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 Visa i.e., Visa and ALIBABA go up and down completely randomly.
Pair Corralation between Visa and ALIBABA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 1.35 times more return on investment than ALIBABA. However, Visa is 1.35 times more volatile than ALIBABA GROUP HLDG. It trades about 0.34 of its potential returns per unit of risk. ALIBABA GROUP HLDG is currently generating about -0.19 per unit of risk. If you would invest 28,365 in Visa Class A on August 28, 2024 and sell it today you would earn a total of 2,817 from holding Visa Class A or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
Visa Class A vs. ALIBABA GROUP HLDG
Performance |
| Timeline |
| Visa Class A |
| ALIBABA GROUP HLDG |
Visa and ALIBABA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and ALIBABA
The main advantage of trading using opposite Visa and ALIBABA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Morningstar Unconstrained Allocation | Visa vs. Sitka Gold Corp | Visa vs. MSCI ACWI exAUCONSUMER |
| ALIBABA vs. AEP TEX INC | ALIBABA vs. US BANK NATIONAL | ALIBABA vs. Omega Healthcare Investors | ALIBABA vs. Zoom Video 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 Stocks Directory module to find actively traded stocks across global markets.
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