Correlation Between Kuaishou Technology and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Kuaishou Technology 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 Kuaishou Technology and Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kuaishou Technology and Weibo Corp, you can compare the effects of market volatilities on Kuaishou Technology 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 Kuaishou Technology with a short position of Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuaishou Technology and Weibo Corp.
Diversification Opportunities for Kuaishou Technology and Weibo Corp
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kuaishou and Weibo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kuaishou Technology and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and Kuaishou Technology 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 Kuaishou Technology 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 Kuaishou Technology i.e., Kuaishou Technology and Weibo Corp go up and down completely randomly.
Pair Corralation between Kuaishou Technology and Weibo Corp
Assuming the 90 days horizon Kuaishou Technology is expected to generate 1.76 times more return on investment than Weibo Corp. However, Kuaishou Technology is 1.76 times more volatile than Weibo Corp. It trades about 0.13 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.13 per unit of risk. If you would invest 106.00 in Kuaishou Technology on November 4, 2024 and sell it today you would earn a total of 12.00 from holding Kuaishou Technology or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Kuaishou Technology vs. Weibo Corp
Performance |
| Timeline |
| Kuaishou Technology |
| Weibo Corp |
Kuaishou Technology and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuaishou Technology and Weibo Corp
The main advantage of trading using opposite Kuaishou Technology and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuaishou Technology 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.| Kuaishou Technology vs. Tencent Holdings | Kuaishou Technology vs. DouYu International Holdings | Kuaishou Technology vs. Tencent Music Entertainment | Kuaishou Technology vs. Weibo Corp |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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