Correlation Between CLPS and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both CLPS 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 CLPS and Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLPS Inc and Weibo Corp, you can compare the effects of market volatilities on CLPS 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 CLPS with a short position of Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLPS and Weibo Corp.
Diversification Opportunities for CLPS and Weibo Corp
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between CLPS and Weibo is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CLPS Inc and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and CLPS 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 CLPS Inc 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 CLPS i.e., CLPS and Weibo Corp go up and down completely randomly.
Pair Corralation between CLPS and Weibo Corp
Given the investment horizon of 90 days CLPS Inc is expected to generate 1.3 times more return on investment than Weibo Corp. However, CLPS is 1.3 times more volatile than Weibo Corp. It trades about 0.08 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.0 per unit of risk. If you would invest 117.00 in CLPS Inc on October 21, 2024 and sell it today you would earn a total of 4.00 from holding CLPS Inc or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CLPS Inc vs. Weibo Corp
Performance |
| Timeline |
| CLPS Inc |
| Weibo Corp |
CLPS and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLPS and Weibo Corp
The main advantage of trading using opposite CLPS and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLPS 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.The idea behind CLPS Inc and Weibo Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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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