Correlation Between Bilibili and Sea
Can any of the company-specific risk be diversified away by investing in both Bilibili and Sea 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 Bilibili and Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilibili and Sea Limited, you can compare the effects of market volatilities on Bilibili and Sea 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 Bilibili with a short position of Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilibili and Sea.
Diversification Opportunities for Bilibili and Sea
Very good diversification
The 3 months correlation between Bilibili and Sea is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and Sea Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea Limited and Bilibili 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 Bilibili are associated (or correlated) with Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea Limited has no effect on the direction of Bilibili i.e., Bilibili and Sea go up and down completely randomly.
Pair Corralation between Bilibili and Sea
Assuming the 90 days trading horizon Bilibili is expected to under-perform the Sea. In addition to that, Bilibili is 1.85 times more volatile than Sea Limited. It trades about -0.1 of its total potential returns per unit of risk. Sea Limited is currently generating about 0.17 per unit of volatility. If you would invest 8,810 in Sea Limited on October 31, 2024 and sell it today you would earn a total of 2,870 from holding Sea Limited or generate 32.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilibili vs. Sea Limited
Performance |
| Timeline |
| Bilibili |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sea Limited |
Bilibili and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilibili and Sea
The main advantage of trading using opposite Bilibili and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilibili position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea's long position.| Bilibili vs. Clean Energy Fuels | Bilibili vs. Mitsui Chemicals | Bilibili vs. CHEMICAL INDUSTRIES | Bilibili vs. BW OFFSHORE LTD |
| Sea vs. Coor Service Management | Sea vs. ADRIATIC METALS LS 013355 | Sea vs. Perseus Mining Limited | Sea vs. ARDAGH METAL PACDL 0001 |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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