Correlation Between VanEck Semiconductor and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both VanEck Semiconductor 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 VanEck Semiconductor and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Semiconductor ETF and Alibaba Group Holding, you can compare the effects of market volatilities on VanEck Semiconductor 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 VanEck Semiconductor with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Semiconductor and Alibaba Group.
Diversification Opportunities for VanEck Semiconductor and Alibaba Group
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VanEck and Alibaba is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Semiconductor ETF 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 VanEck Semiconductor 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 VanEck Semiconductor ETF 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 VanEck Semiconductor i.e., VanEck Semiconductor and Alibaba Group go up and down completely randomly.
Pair Corralation between VanEck Semiconductor and Alibaba Group
Considering the 90-day investment horizon VanEck Semiconductor ETF is expected to generate 0.9 times more return on investment than Alibaba Group. However, VanEck Semiconductor ETF is 1.11 times less risky than Alibaba Group. It trades about 0.07 of its potential returns per unit of risk. Alibaba Group Holding is currently generating about -0.15 per unit of risk. If you would invest 19,778 in VanEck Semiconductor ETF on January 20, 2024 and sell it today you would earn a total of 1,085 from holding VanEck Semiconductor ETF or generate 5.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.35% |
| Values | Daily Returns |
VanEck Semiconductor ETF vs. Alibaba Group Holding
Performance |
| Timeline |
| VanEck Semiconductor ETF |
| Alibaba Group Holding |
VanEck Semiconductor and Alibaba Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Semiconductor and Alibaba Group
The main advantage of trading using opposite VanEck Semiconductor and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Semiconductor 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.| VanEck Semiconductor vs. ARK Genomic Revolution | VanEck Semiconductor vs. ARK Innovation ETF | VanEck Semiconductor vs. ARK Space Exploration |
| Alibaba Group vs. Harmony Gold Mining | Alibaba Group vs. Compania de Transporte | Alibaba Group vs. B Gaming SA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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