Correlation Between Alibaba Group and Klondike Silver

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Alibaba Group and Klondike Silver 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 Klondike Silver 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 Klondike Silver Corp, you can compare the effects of market volatilities on Alibaba Group and Klondike Silver 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 Klondike Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and Klondike Silver.

Diversification Opportunities for Alibaba Group and Klondike Silver

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Alibaba and Klondike is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Klondike Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klondike Silver Corp 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 Klondike Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klondike Silver Corp has no effect on the direction of Alibaba Group i.e., Alibaba Group and Klondike Silver go up and down completely randomly.

Pair Corralation between Alibaba Group and Klondike Silver

Given the investment horizon of 90 days Alibaba Group Holding is expected to under-perform the Klondike Silver. But the stock apears to be less risky and, when comparing its historical volatility, Alibaba Group Holding is 3.33 times less risky than Klondike Silver. The stock trades about -0.22 of its potential returns per unit of risk. The Klondike Silver Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2.00  in Klondike Silver Corp on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Klondike Silver Corp or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy96.77%
ValuesDaily Returns

Alibaba Group Holding  vs.  Klondike Silver Corp

 Performance 
       Timeline  
Alibaba Group Holding 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 unsteady performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Klondike Silver Corp 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Klondike Silver Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Klondike Silver showed solid returns over the last few months and may actually be approaching a breakup point.

Alibaba Group and Klondike Silver Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alibaba Group and Klondike Silver

The main advantage of trading using opposite Alibaba Group and Klondike Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Klondike Silver 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 Klondike Silver will offset losses from the drop in Klondike Silver's long position.
The idea behind Alibaba Group Holding and Klondike Silver Corp 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Money Managers
Screen money managers from public funds and ETFs managed around the world
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Bonds Directory
Find actively traded corporate debentures issued by US companies