Correlation Between Bilibili and NetEase Inc
Can any of the company-specific risk be diversified away by investing in both Bilibili and NetEase Inc 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 NetEase Inc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bilibili and NetEase, you can compare the effects of market volatilities on Bilibili and NetEase Inc 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 NetEase Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilibili and NetEase Inc.
Diversification Opportunities for Bilibili and NetEase Inc
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bilibili and NetEase Inc is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and NetEase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetEase Inc 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 NetEase Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetEase Inc has no effect on the direction of Bilibili i.e., Bilibili and NetEase Inc go up and down completely randomly.
Pair Corralation between Bilibili and NetEase Inc
Given the investment horizon of 90 days Bilibili is expected to generate 0.53 times more return on investment than NetEase Inc. However, Bilibili is 1.89 times less risky than NetEase Inc. It trades about 0.18 of its potential returns per unit of risk. NetEase is currently generating about 0.05 per unit of risk. If you would invest 1,699 in Bilibili on December 6, 2024 and sell it today you would earn a total of 529.00 from holding Bilibili or generate 31.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.18% |
| Values | Daily Returns |
Bilibili vs. NetEase
Performance |
| Timeline |
| Bilibili |
| NetEase Inc |
Bilibili and NetEase Inc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bilibili and NetEase Inc
The main advantage of trading using opposite Bilibili and NetEase Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilibili position performs unexpectedly, NetEase Inc 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 NetEase Inc will offset losses from the drop in NetEase Inc's long position.| Bilibili vs. Electronic Arts | Bilibili vs. Take Two Interactive Software | Bilibili vs. SohuCom | Bilibili vs. Skillz Platform |
| NetEase Inc vs. Bilibili | NetEase Inc vs. Electronic Arts | NetEase Inc vs. Take Two Interactive Software | NetEase Inc vs. SohuCom |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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