Correlation Between Bilibili and Aristocrat Leisure
Can any of the company-specific risk be diversified away by investing in both Bilibili and Aristocrat Leisure 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 Aristocrat Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilibili and Aristocrat Leisure Limited, you can compare the effects of market volatilities on Bilibili and Aristocrat Leisure 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 Aristocrat Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilibili and Aristocrat Leisure.
Diversification Opportunities for Bilibili and Aristocrat Leisure
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bilibili and Aristocrat is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and Aristocrat Leisure Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristocrat Leisure 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 Aristocrat Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristocrat Leisure has no effect on the direction of Bilibili i.e., Bilibili and Aristocrat Leisure go up and down completely randomly.
Pair Corralation between Bilibili and Aristocrat Leisure
Assuming the 90 days trading horizon Bilibili is expected to under-perform the Aristocrat Leisure. In addition to that, Bilibili is 2.34 times more volatile than Aristocrat Leisure Limited. It trades about -0.09 of its total potential returns per unit of risk. Aristocrat Leisure Limited is currently generating about 0.06 per unit of volatility. If you would invest 4,118 in Aristocrat Leisure Limited on October 25, 2024 and sell it today you would earn a total of 102.00 from holding Aristocrat Leisure Limited or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bilibili vs. Aristocrat Leisure Limited
Performance |
| Timeline |
| Bilibili |
| Aristocrat Leisure |
Bilibili and Aristocrat Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilibili and Aristocrat Leisure
The main advantage of trading using opposite Bilibili and Aristocrat Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilibili position performs unexpectedly, Aristocrat Leisure 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 Aristocrat Leisure will offset losses from the drop in Aristocrat Leisure's long position.| Bilibili vs. GEELY AUTOMOBILE | Bilibili vs. INTER CARS SA | Bilibili vs. SMA Solar Technology | Bilibili vs. Computershare Limited |
| Aristocrat Leisure vs. Wizz Air Holdings | Aristocrat Leisure vs. Columbia Sportswear | Aristocrat Leisure vs. FAIR ISAAC | Aristocrat Leisure vs. PLAYTECH |
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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