Correlation Between Ke Holdings and Vimeo
Can any of the company-specific risk be diversified away by investing in both Ke Holdings and Vimeo 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 Ke Holdings and Vimeo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ke Holdings and Vimeo Inc, you can compare the effects of market volatilities on Ke Holdings and Vimeo 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 Ke Holdings with a short position of Vimeo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and Vimeo.
Diversification Opportunities for Ke Holdings and Vimeo
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BEKE and Vimeo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and Vimeo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vimeo Inc and Ke Holdings 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 Ke Holdings are associated (or correlated) with Vimeo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vimeo Inc has no effect on the direction of Ke Holdings i.e., Ke Holdings and Vimeo go up and down completely randomly.
Pair Corralation between Ke Holdings and Vimeo
Given the investment horizon of 90 days Ke Holdings is expected to under-perform the Vimeo. But the stock apears to be less risky and, when comparing its historical volatility, Ke Holdings is 2.97 times less risky than Vimeo. The stock trades about -0.2 of its potential returns per unit of risk. The Vimeo Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 486.00 in Vimeo Inc on September 2, 2024 and sell it today you would earn a total of 167.00 from holding Vimeo Inc or generate 34.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ke Holdings vs. Vimeo Inc
Performance |
| Timeline |
| Ke Holdings |
| Vimeo Inc |
Ke Holdings and Vimeo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ke Holdings and Vimeo
The main advantage of trading using opposite Ke Holdings and Vimeo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings position performs unexpectedly, Vimeo 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 Vimeo will offset losses from the drop in Vimeo's long position.| Ke Holdings vs. Marcus Millichap | Ke Holdings vs. Digitalbridge Group | Ke Holdings vs. Jones Lang LaSalle | Ke Holdings vs. CBRE Group Class |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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