Correlation Between Alibaba Group and Intel
Can any of the company-specific risk be diversified away by investing in both Alibaba Group 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 Group and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alibaba Group Holding and Intel, you can compare the effects of market volatilities on Alibaba Group 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 Group with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Intel.
Diversification Opportunities for Alibaba Group and Intel
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alibaba and Intel is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Alibaba Group 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 Group Holding 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 Group i.e., Alibaba Group and Intel go up and down completely randomly.
Pair Corralation between Alibaba Group and Intel
Assuming the 90 days trading horizon Alibaba Group Holding is expected to generate 0.89 times more return on investment than Intel. However, Alibaba Group Holding is 1.13 times less risky than Intel. It trades about -0.09 of its potential returns per unit of risk. Intel is currently generating about -0.2 per unit of risk. If you would invest 932,000 in Alibaba Group Holding on January 25, 2024 and sell it today you would lose (79,950) from holding Alibaba Group Holding or give up 8.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 92.68% |
| Values | Daily Returns |
Alibaba Group Holding vs. Intel
Performance |
| Timeline |
| Alibaba Group Holding |
| Intel |
Alibaba Group and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alibaba Group and Intel
The main advantage of trading using opposite Alibaba Group and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group 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 Group vs. Harmony Gold Mining | Alibaba Group vs. Transportadora de Gas | Alibaba Group vs. United States Steel | Alibaba Group vs. Telecom Argentina |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |