Correlation Between Aristocrat Leisure and Bilibili
Can any of the company-specific risk be diversified away by investing in both Aristocrat Leisure and Bilibili 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 Aristocrat Leisure and Bilibili into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristocrat Leisure Limited and Bilibili, you can compare the effects of market volatilities on Aristocrat Leisure and Bilibili 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 Aristocrat Leisure with a short position of Bilibili. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristocrat Leisure and Bilibili.
Diversification Opportunities for Aristocrat Leisure and Bilibili
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aristocrat and Bilibili is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aristocrat Leisure Limited and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili and Aristocrat Leisure 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 Aristocrat Leisure Limited are associated (or correlated) with Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Aristocrat Leisure i.e., Aristocrat Leisure and Bilibili go up and down completely randomly.
Pair Corralation between Aristocrat Leisure and Bilibili
Assuming the 90 days horizon Aristocrat Leisure Limited is expected to generate 0.37 times more return on investment than Bilibili. However, Aristocrat Leisure Limited is 2.67 times less risky than Bilibili. It trades about 0.05 of its potential returns per unit of risk. Bilibili is currently generating about -0.12 per unit of risk. If you would invest 4,160 in Aristocrat Leisure Limited on October 10, 2024 and sell it today you would earn a total of 40.00 from holding Aristocrat Leisure Limited or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Aristocrat Leisure Limited vs. Bilibili
Performance |
| Timeline |
| Aristocrat Leisure |
| Bilibili |
Aristocrat Leisure and Bilibili Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristocrat Leisure and Bilibili
The main advantage of trading using opposite Aristocrat Leisure and Bilibili positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristocrat Leisure position performs unexpectedly, Bilibili 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 Bilibili will offset losses from the drop in Bilibili's long position.| Aristocrat Leisure vs. Sea Limited | Aristocrat Leisure vs. Electronic Arts | Aristocrat Leisure vs. NEXON Co | Aristocrat Leisure vs. NEXON Co |
| Bilibili vs. THORNEY TECHS LTD | Bilibili vs. ANGLO ASIAN MINING | Bilibili vs. Sunny Optical Technology | Bilibili vs. Minerals Technologies |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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