Correlation Between Onewater Marine and Alibaba Group

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

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

Diversification Opportunities for Onewater Marine and Alibaba Group

0.0

Correlation Coefficient

Onewater Marine  Alibaba Group

Pay attention - limited upside

The 3 months correlation between Onewater and Alibaba is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Onewater Marine 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 Onewater Marine 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 Onewater Marine 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 Onewater Marine i.e., Onewater Marine and Alibaba Group go up and down completely randomly.

Pair Corralation between Onewater Marine and Alibaba Group

Given the investment horizon of 90 days Onewater Marine is expected to under-perform the Alibaba Group. In addition to that, Onewater Marine is 1.91 times more volatile than Alibaba Group Holding. It trades about -0.34 of its total potential returns per unit of risk. Alibaba Group Holding is currently generating about 0.11 per unit of volatility. If you would invest  7,337  in Alibaba Group Holding on January 30, 2024 and sell it today you would earn a total of  268.00  from holding Alibaba Group Holding or generate 3.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Onewater Marine  vs.  Alibaba Group Holding

Onewater Marine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Onewater Marine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated 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 somewhat strong fundamental drivers, Alibaba Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Onewater Marine and Alibaba Group

The main advantage of trading using opposite Onewater Marine and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onewater Marine 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 Onewater Marine 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.