Correlation Between Boxed and Alibaba Group

Can any of the company-specific risk be diversified away by investing in both Boxed and Alibaba Group 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 Boxed and Alibaba Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Boxed Inc and Alibaba Group Holding, you can compare the effects of market volatilities on Boxed and Alibaba Group 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 Boxed with a short position of Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boxed and Alibaba Group.

Diversification Opportunities for Boxed and Alibaba Group

0.01

Correlation Coefficient

Boxed  Alibaba Group

Significant diversification

The 3 months correlation between Boxed and Alibaba is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Boxed Inc and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding and Boxed 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 Boxed Inc are associated (or correlated) with Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Boxed i.e., Boxed and Alibaba Group go up and down completely randomly.

Pair Corralation between Boxed and Alibaba Group

If you would invest  1,025  in Alibaba Group Holding on August 30, 2024 and sell it today you would earn a total of  48.00  from holding Alibaba Group Holding or generate 4.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Boxed Inc  vs.  Alibaba Group Holding

Boxed Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boxed Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Boxed is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Alibaba Group Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alibaba Group Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Alibaba Group may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Boxed and Alibaba Group

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

The idea behind Boxed Inc and Alibaba Group Holding 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.