Correlation Between JMU and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both JMU 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 JMU and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JMU Limited and Alibaba Group Holding, you can compare the effects of market volatilities on JMU 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 JMU with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JMU and Alibaba Group.
Diversification Opportunities for JMU and Alibaba Group
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JMU and Alibaba is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JMU Limited 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 JMU 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 JMU Limited 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 JMU i.e., JMU and Alibaba Group go up and down completely randomly.
Pair Corralation between JMU and Alibaba Group
If you would invest (100.00) in JMU Limited on January 21, 2024 and sell it today you would earn a total of 100.00 from holding JMU Limited or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
JMU Limited vs. Alibaba Group Holding
Performance |
| Timeline |
| JMU Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alibaba Group Holding |
JMU and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JMU and Alibaba Group
The main advantage of trading using opposite JMU and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JMU 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.The idea behind JMU Limited and Alibaba Group Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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