Correlation Between Alibaba Group and 1125 SCHWYZ

Can any of the company-specific risk be diversified away by investing in both Alibaba Group and 1125 SCHWYZ 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 1125 SCHWYZ 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 1125 SCHWYZ KB, you can compare the effects of market volatilities on Alibaba Group and 1125 SCHWYZ 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 1125 SCHWYZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alibaba Group and 1125 SCHWYZ.

Diversification Opportunities for Alibaba Group and 1125 SCHWYZ

0.0

Correlation Coefficient

Alibaba Group  1125 SCHWYZ

Pay attention - limited upside

The 3 months correlation between Alibaba and 1125 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and 1125 SCHWYZ KB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1125 SCHWYZ KB 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 1125 SCHWYZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1125 SCHWYZ KB has no effect on the direction of Alibaba Group i.e., Alibaba Group and 1125 SCHWYZ go up and down completely randomly.

Pair Corralation between Alibaba Group and 1125 SCHWYZ

If you would invest  7,976  in Alibaba Group Holding on October 5, 2024 and sell it today you would earn a total of  519.00  from holding Alibaba Group Holding or generate 6.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alibaba Group Holding  vs.  1125 SCHWYZ KB

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 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.

1125 SCHWYZ KB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1125 SCHWYZ KB has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, 1125 SCHWYZ is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alibaba Group and 1125 SCHWYZ

The main advantage of trading using opposite Alibaba Group and 1125 SCHWYZ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, 1125 SCHWYZ 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 1125 SCHWYZ will offset losses from the drop in 1125 SCHWYZ's long position.

The idea behind Alibaba Group Holding and 1125 SCHWYZ KB 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.

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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 Positions Ratings module to 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.