Correlation Between Alibaba Group and Excelsior Alimentos

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

Diversification Opportunities for Alibaba Group and Excelsior Alimentos

AlibabaExcelsiorDiversified AwayAlibabaExcelsiorDiversified Away100%
0.49
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Alibaba and Excelsior is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Group Holding and Excelsior Alimentos SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelsior Alimentos 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 Excelsior Alimentos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelsior Alimentos has no effect on the direction of Alibaba Group i.e., Alibaba Group and Excelsior Alimentos go up and down completely randomly.

Pair Corralation between Alibaba Group and Excelsior Alimentos

Assuming the 90 days trading horizon Alibaba Group Holding is expected to under-perform the Excelsior Alimentos. In addition to that, Alibaba Group is 13.44 times more volatile than Excelsior Alimentos SA. It trades about -0.07 of its total potential returns per unit of risk. Excelsior Alimentos SA is currently generating about 0.03 per unit of volatility. If you would invest  7,799  in Excelsior Alimentos SA on October 26, 2024 and sell it today you would earn a total of  21.00  from holding Excelsior Alimentos SA or generate 0.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Alibaba Group Holding  vs.  Excelsior Alimentos SA

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -15-10-50
JavaScript chart by amCharts 3.21.15BABA34 BAUH4
       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 latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan17.51818.51919.52020.521
Excelsior Alimentos 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Excelsior Alimentos SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Excelsior Alimentos is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan747576777879

Alibaba Group and Excelsior Alimentos Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.99-2.99-1.99-0.98-0.010.921.862.83.73 1234567
JavaScript chart by amCharts 3.21.15BABA34 BAUH4
       Returns  

Pair Trading with Alibaba Group and Excelsior Alimentos

The main advantage of trading using opposite Alibaba Group and Excelsior Alimentos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Group position performs unexpectedly, Excelsior Alimentos 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 Excelsior Alimentos will offset losses from the drop in Excelsior Alimentos' long position.
The idea behind Alibaba Group Holding and Excelsior Alimentos SA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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