Correlation Between Topbuild Corp and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Topbuild Corp 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 Topbuild Corp and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Topbuild Corp and Alibaba Group Holding, you can compare the effects of market volatilities on Topbuild Corp 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 Topbuild Corp with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Topbuild Corp and Alibaba Group.
Diversification Opportunities for Topbuild Corp and Alibaba Group
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Topbuild and Alibaba is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Topbuild Corp 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 Topbuild Corp 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 Topbuild Corp 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 Topbuild Corp i.e., Topbuild Corp and Alibaba Group go up and down completely randomly.
Pair Corralation between Topbuild Corp and Alibaba Group
Considering the 90-day investment horizon Topbuild Corp is expected to generate 0.73 times more return on investment than Alibaba Group. However, Topbuild Corp is 1.36 times less risky than Alibaba Group. It trades about 0.14 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.03 per unit of risk. If you would invest 37,426 in Topbuild Corp on December 29, 2023 and sell it today you would earn a total of 6,647 from holding Topbuild Corp or generate 17.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Topbuild Corp vs. Alibaba Group Holding
Performance |
Timeline |
Topbuild Corp |
Alibaba Group Holding |
Topbuild Corp and Alibaba Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Topbuild Corp and Alibaba Group
The main advantage of trading using opposite Topbuild Corp and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Topbuild Corp 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.Topbuild Corp vs. JJill Inc | Topbuild Corp vs. Canada Goose Holdings | Topbuild Corp vs. Boot Barn Holdings | Topbuild Corp vs. Carters |
Alibaba Group vs. Harmony Gold Mining | Alibaba Group vs. Compania De Transporte | Alibaba Group vs. United States Steel | Alibaba Group vs. Transportadora De Gas |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |