Correlation Between Meiwu Technology and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Meiwu Technology 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 Meiwu Technology and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meiwu Technology Co and Alibaba Group Holding, you can compare the effects of market volatilities on Meiwu Technology 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 Meiwu Technology with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meiwu Technology and Alibaba Group.
Diversification Opportunities for Meiwu Technology and Alibaba Group
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Meiwu and Alibaba is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Meiwu Technology Co 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 Meiwu Technology 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 Meiwu Technology Co 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 Meiwu Technology i.e., Meiwu Technology and Alibaba Group go up and down completely randomly.
Pair Corralation between Meiwu Technology and Alibaba Group
Considering the 90-day investment horizon Meiwu Technology is expected to generate 1.65 times less return on investment than Alibaba Group. In addition to that, Meiwu Technology is 2.34 times more volatile than Alibaba Group Holding. It trades about 0.0 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 1,072 in Alibaba Group Holding on September 13, 2024 and sell it today you would earn a total of 28.00 from holding Alibaba Group Holding or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meiwu Technology Co vs. Alibaba Group Holding
Performance |
| Timeline |
| Meiwu Technology |
| Alibaba Group Holding |
Meiwu Technology and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meiwu Technology and Alibaba Group
The main advantage of trading using opposite Meiwu Technology and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meiwu Technology 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.| Meiwu Technology vs. MOGU Inc | Meiwu Technology vs. iPower Inc | Meiwu Technology vs. Jeffs Brands | Meiwu Technology vs. Kidpik Corp |
| Alibaba Group vs. Meituan ADR | Alibaba Group vs. Meituan | Alibaba Group vs. Qurate Retail Series | Alibaba Group vs. ThredUp |
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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