Correlation Between Air Products and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Air Products and Weibo Corp 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 Air Products and Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and Weibo Corp, you can compare the effects of market volatilities on Air Products and Weibo Corp 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 Air Products with a short position of Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Weibo Corp.
Diversification Opportunities for Air Products and Weibo Corp
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Air and Weibo is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and Air Products 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 Air Products and are associated (or correlated) with Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of Air Products i.e., Air Products and Weibo Corp go up and down completely randomly.
Pair Corralation between Air Products and Weibo Corp
Considering the 90-day investment horizon Air Products and is expected to generate 0.52 times more return on investment than Weibo Corp. However, Air Products and is 1.91 times less risky than Weibo Corp. It trades about 0.16 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.05 per unit of risk. If you would invest 28,693 in Air Products and on November 30, 2024 and sell it today you would earn a total of 2,922 from holding Air Products and or generate 10.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Weibo Corp
Performance |
| Timeline |
| Air Products |
| Weibo Corp |
Air Products and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Weibo Corp
The main advantage of trading using opposite Air Products and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp's long position.| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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