Correlation Between Alibaba Health and High Tide
Can any of the company-specific risk be diversified away by investing in both Alibaba Health and High Tide 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 Health and High Tide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alibaba Health Information and High Tide, you can compare the effects of market volatilities on Alibaba Health and High Tide 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 Health with a short position of High Tide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Health and High Tide.
Diversification Opportunities for Alibaba Health and High Tide
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alibaba and High is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Health Information and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide and Alibaba Health 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 Health Information are associated (or correlated) with High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of Alibaba Health i.e., Alibaba Health and High Tide go up and down completely randomly.
Pair Corralation between Alibaba Health and High Tide
Assuming the 90 days horizon Alibaba Health Information is expected to generate 2.49 times more return on investment than High Tide. However, Alibaba Health is 2.49 times more volatile than High Tide. It trades about 0.08 of its potential returns per unit of risk. High Tide is currently generating about -0.15 per unit of risk. If you would invest 51.00 in Alibaba Health Information on December 1, 2024 and sell it today you would earn a total of 13.00 from holding Alibaba Health Information or generate 25.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Alibaba Health Information vs. High Tide
Performance |
Timeline |
Alibaba Health Infor |
High Tide |
Alibaba Health and High Tide Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alibaba Health and High Tide
The main advantage of trading using opposite Alibaba Health and High Tide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Health position performs unexpectedly, High Tide 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 High Tide will offset losses from the drop in High Tide's long position.Alibaba Health vs. Alternative Energy | Alibaba Health vs. Allstar Health Brands | Alibaba Health vs. Walgreens Boots Alliance | Alibaba Health vs. Alibaba Health Information |
High Tide vs. SunLink Health Systems | High Tide vs. Kiaro Holdings Corp | High Tide vs. China Jo Jo Drugstores | High Tide vs. PetMed Express |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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