Correlation Between Redbubble and Alibaba Group

Can any of the company-specific risk be diversified away by investing in both Redbubble 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 Redbubble and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Redbubble Limited and Alibaba Group Holding, you can compare the effects of market volatilities on Redbubble 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 Redbubble with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redbubble and Alibaba Group.

Diversification Opportunities for Redbubble and Alibaba Group

0.36

Correlation Coefficient

Redbubble  Alibaba Group

Weak diversification

The 3 months correlation between Redbubble and Alibaba is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Redbubble 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 Redbubble 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 Redbubble 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 Redbubble i.e., Redbubble and Alibaba Group go up and down completely randomly.

Pair Corralation between Redbubble and Alibaba Group

Assuming the 90 days horizon Redbubble is expected to generate 2.49 times less return on investment than Alibaba Group. In addition to that, Redbubble is 1.63 times more volatile than Alibaba Group Holding. It trades about 0.02 of its total potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.08 per unit of volatility. If you would invest  936.00  in Alibaba Group Holding on July 23, 2025 and sell it today you would earn a total of  1,179  from holding Alibaba Group Holding or generate 125.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.65%
Values	Daily Returns

Redbubble Limited  vs.  Alibaba Group Holding

Redbubble Limited

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Redbubble Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental drivers, Redbubble reported solid returns over the last few months and may actually be approaching a breakup point.

Alibaba Group Holding

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alibaba Group Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Alibaba Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Redbubble and Alibaba Group

The main advantage of trading using opposite Redbubble and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redbubble 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 Redbubble 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.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.