Correlation Between Imax Corp and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Imax Corp 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 Imax Corp and Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imax Corp and Weibo Corp, you can compare the effects of market volatilities on Imax Corp 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 Imax Corp with a short position of Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imax Corp and Weibo Corp.
Diversification Opportunities for Imax Corp and Weibo Corp
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Imax and Weibo is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and Imax Corp 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 Imax Corp 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 Imax Corp i.e., Imax Corp and Weibo Corp go up and down completely randomly.
Pair Corralation between Imax Corp and Weibo Corp
Given the investment horizon of 90 days Imax Corp is expected to under-perform the Weibo Corp. But the stock apears to be less risky and, when comparing its historical volatility, Imax Corp is 1.53 times less risky than Weibo Corp. The stock trades about -0.18 of its potential returns per unit of risk. The Weibo Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 928.00 in Weibo Corp on November 3, 2024 and sell it today you would earn a total of 54.00 from holding Weibo Corp or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imax Corp vs. Weibo Corp
Performance |
| Timeline |
| Imax Corp |
| Weibo Corp |
Imax Corp and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imax Corp and Weibo Corp
The main advantage of trading using opposite Imax Corp and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imax Corp 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.| Imax Corp vs. Marcus | Imax Corp vs. Dave Busters Entertainment | Imax Corp vs. AMC Networks | Imax Corp vs. News Corp A |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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