Correlation Between GEN Restaurant and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both GEN Restaurant 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 GEN Restaurant and Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GEN Restaurant Group, and Weibo Corp, you can compare the effects of market volatilities on GEN Restaurant 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 GEN Restaurant with a short position of Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GEN Restaurant and Weibo Corp.
Diversification Opportunities for GEN Restaurant and Weibo Corp
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between GEN and Weibo is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding GEN Restaurant Group, and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and GEN Restaurant 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 GEN Restaurant Group, 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 GEN Restaurant i.e., GEN Restaurant and Weibo Corp go up and down completely randomly.
Pair Corralation between GEN Restaurant and Weibo Corp
Given the investment horizon of 90 days GEN Restaurant Group, is expected to generate 16.52 times more return on investment than Weibo Corp. However, GEN Restaurant is 16.52 times more volatile than Weibo Corp. It trades about 0.05 of its potential returns per unit of risk. Weibo Corp is currently generating about -0.01 per unit of risk. If you would invest 0.00 in GEN Restaurant Group, on September 3, 2024 and sell it today you would earn a total of 848.00 from holding GEN Restaurant Group, or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.13% |
| Values | Daily Returns |
GEN Restaurant Group, vs. Weibo Corp
Performance |
| Timeline |
| GEN Restaurant Group, |
| Weibo Corp |
GEN Restaurant and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GEN Restaurant and Weibo Corp
The main advantage of trading using opposite GEN Restaurant and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GEN Restaurant 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.| GEN Restaurant vs. SL Green Realty | GEN Restaurant vs. Haverty Furniture Companies | GEN Restaurant vs. FiscalNote Holdings | GEN Restaurant vs. Cadence Design Systems |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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