Correlation Between Alibaba Group and ADATOM COM

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Can any of the company-specific risk be diversified away by investing in both Alibaba Group and ADATOM COM 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 ADATOM COM 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 ADATOM COM INC, you can compare the effects of market volatilities on Alibaba Group and ADATOM COM 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 ADATOM COM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and ADATOM COM.

Diversification Opportunities for Alibaba Group and ADATOM COM

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Alibaba and ADATOM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and ADATOM COM INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADATOM COM INC 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 ADATOM COM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADATOM COM INC has no effect on the direction of Alibaba Group i.e., Alibaba Group and ADATOM COM go up and down completely randomly.

Pair Corralation between Alibaba Group and ADATOM COM

If you would invest  9,901  in Alibaba Group Holding on April 5, 2022 and sell it today you would earn a total of  1,699  from holding Alibaba Group Holding or generate 17.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Alibaba Group Holding  vs.  ADATOM COM INC

 Performance (%) 
      Timeline 
Alibaba Group Holding 
Alibaba Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Alibaba Group Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Alibaba Group may actually be approaching a critical reversion point that can send shares even higher in August 2022.

Alibaba Price Channel

ADATOM COM INC 
ADATOM Performance
0 of 100
Over the last 90 days ADATOM COM INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, ADATOM COM is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Alibaba Group and ADATOM COM Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Alibaba Group and ADATOM COM

The main advantage of trading using opposite Alibaba Group and ADATOM COM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, ADATOM COM 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 ADATOM COM will offset losses from the drop in ADATOM COM's long position.
The idea behind Alibaba Group Holding and ADATOM COM INC 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 CEO Directory module to screen CEOs from public companies around the world.

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