Correlation Between Getty Images and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Getty Images 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 Getty Images and Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Images Holdings and Weibo Corp, you can compare the effects of market volatilities on Getty Images 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 Getty Images with a short position of Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Images and Weibo Corp.
Diversification Opportunities for Getty Images and Weibo Corp
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Getty and Weibo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and Getty Images 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 Getty Images Holdings 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 Getty Images i.e., Getty Images and Weibo Corp go up and down completely randomly.
Pair Corralation between Getty Images and Weibo Corp
Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Weibo Corp. In addition to that, Getty Images is 1.75 times more volatile than Weibo Corp. It trades about -0.28 of its total potential returns per unit of risk. Weibo Corp is currently generating about 0.11 per unit of volatility. If you would invest 905.00 in Weibo Corp on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Weibo Corp or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Images Holdings vs. Weibo Corp
Performance |
| Timeline |
| Getty Images Holdings |
| Weibo Corp |
Getty Images and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Images and Weibo Corp
The main advantage of trading using opposite Getty Images and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Images 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.| Getty Images vs. MediaAlpha | Getty Images vs. Asset Entities Class | Getty Images vs. Yelp Inc | Getty Images vs. Shutterstock |
| Weibo Corp vs. MediaAlpha | Weibo Corp vs. Asset Entities Class | Weibo Corp vs. Yelp Inc | Weibo Corp vs. Shutterstock |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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