Correlation Between Amada and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Amada 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 Amada and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amada Co and Alibaba Group Holding, you can compare the effects of market volatilities on Amada 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 Amada with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amada and Alibaba Group.
Diversification Opportunities for Amada and Alibaba Group
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amada and Alibaba is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Amada 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 Amada 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 Amada 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 Amada i.e., Amada and Alibaba Group go up and down completely randomly.
Pair Corralation between Amada and Alibaba Group
Assuming the 90 days horizon Amada Co is expected to generate 0.82 times more return on investment than Alibaba Group. However, Amada Co is 1.22 times less risky than Alibaba Group. It trades about 0.09 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.02 per unit of risk. If you would invest 4,051 in Amada Co on January 21, 2024 and sell it today you would earn a total of 403.00 from holding Amada Co or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Amada Co vs. Alibaba Group Holding
Performance |
| Timeline |
| Amada |
| Alibaba Group Holding |
Amada and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amada and Alibaba Group
The main advantage of trading using opposite Amada and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amada 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.| Amada vs. Scandinavian Tobacco Group | Amada vs. Willamette Valley Vineyards | Amada vs. Duckhorn Portfolio | Amada vs. National CineMedia |
| Alibaba Group vs. Shoe Carnival | Alibaba Group vs. Hibbett Sports | Alibaba Group vs. Citi Trends | Alibaba Group vs. Zumiez Inc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |