Correlation Between CRISPR Therapeutics and Alibaba Group

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

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

Diversification Opportunities for CRISPR Therapeutics and Alibaba Group

0.0

Correlation Coefficient

CRISPR Therapeutics  Alibaba Group

Pay attention - limited upside

The 3 months correlation between CRISPR and Alibaba is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CRISPR Therapeutics AG 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 CRISPR Therapeutics 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 CRISPR Therapeutics AG 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 CRISPR Therapeutics i.e., CRISPR Therapeutics and Alibaba Group go up and down completely randomly.

Pair Corralation between CRISPR Therapeutics and Alibaba Group

If you would invest  4,080  in CRISPR Therapeutics AG on October 12, 2024 and sell it today you would earn a total of  0.00  from holding CRISPR Therapeutics AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	94.12%
Values	Daily Returns

CRISPR Therapeutics AG  vs.  Alibaba Group Holding

CRISPR Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CRISPR Therapeutics AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CRISPR Therapeutics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Alibaba Group Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alibaba Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with CRISPR Therapeutics and Alibaba Group

The main advantage of trading using opposite CRISPR Therapeutics and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRISPR Therapeutics 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 CRISPR Therapeutics AG 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.