Correlation Between Alibaba Group and Bukit Jalil
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Bukit Jalil 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 Bukit Jalil 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 Bukit Jalil Global, you can compare the effects of market volatilities on Alibaba Group and Bukit Jalil 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 Bukit Jalil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Bukit Jalil.
Diversification Opportunities for Alibaba Group and Bukit Jalil
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alibaba and Bukit is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Bukit Jalil Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Jalil Global 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 Bukit Jalil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Jalil Global has no effect on the direction of Alibaba Group i.e., Alibaba Group and Bukit Jalil go up and down completely randomly.
Pair Corralation between Alibaba Group and Bukit Jalil
Given the investment horizon of 90 days Alibaba Group Holding is expected to under-perform the Bukit Jalil. But the stock apears to be less risky and, when comparing its historical volatility, Alibaba Group Holding is 24.52 times less risky than Bukit Jalil. The stock trades about -0.22 of its potential returns per unit of risk. The Bukit Jalil Global is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3.58 in Bukit Jalil Global on October 5, 2024 and sell it today you would earn a total of 0.02 from holding Bukit Jalil Global or generate 0.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 51.61% |
Values | Daily Returns |
Alibaba Group Holding vs. Bukit Jalil Global
Performance |
Timeline |
Alibaba Group Holding |
Bukit Jalil Global |
Alibaba Group and Bukit Jalil Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alibaba Group and Bukit Jalil
The main advantage of trading using opposite Alibaba Group and Bukit Jalil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Bukit Jalil 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 Bukit Jalil will offset losses from the drop in Bukit Jalil's long position.Alibaba Group vs. PDD Holdings | Alibaba Group vs. MercadoLibre | Alibaba Group vs. JD Inc Adr | Alibaba Group vs. Sea |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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