Correlation Between Mogu Inc and Alibaba Group

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Mogu Inc 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 Mogu Inc and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mogu Inc ADR and Alibaba Group Holding, you can compare the effects of market volatilities on Mogu Inc 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 Mogu Inc with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mogu Inc and Alibaba Group.

Diversification Opportunities for Mogu Inc and Alibaba Group

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Mogu Inc and Alibaba is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mogu Inc ADR 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 Mogu Inc 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 Mogu Inc ADR 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 Mogu Inc i.e., Mogu Inc and Alibaba Group go up and down completely randomly.

Pair Corralation between Mogu Inc and Alibaba Group

Given the investment horizon of 90 days Mogu Inc ADR is expected to under-perform the Alibaba Group. In addition to that, Mogu Inc is 1.75 times more volatile than Alibaba Group Holding. It trades about -0.06 of its total potential returns per unit of risk. Alibaba Group Holding is currently generating about -0.02 per unit of volatility. If you would invest  24,714  in Alibaba Group Holding on April 8, 2022 and sell it today you would lose (12,398)  from holding Alibaba Group Holding or give up 50.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Mogu Inc ADR  vs.  Alibaba Group Holding

 Performance (%) 
      Timeline 
Mogu Inc ADR 
Mogu Inc Performance
0 of 100
Over the last 90 days Mogu Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in August 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Structure and Payout Changes

Last Split Factor
1:12
Last Split Date
2022-03-28

Mogu Inc Price Channel

Alibaba Group Holding 
Alibaba Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Alibaba Group Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental drivers, Alibaba Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Alibaba Price Channel

Mogu Inc and Alibaba Group Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Mogu Inc and Alibaba Group

The main advantage of trading using opposite Mogu Inc and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mogu Inc 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 Mogu Inc ADR 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

Other Complementary Tools

Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Positions Ratings
Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go