Correlation Between CABLEVISION and Weibo Corp

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Can any of the company-specific risk be diversified away by investing in both CABLEVISION 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 CABLEVISION and Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CABLEVISION LIGHTPATH LLC and Weibo Corp, you can compare the effects of market volatilities on CABLEVISION 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 CABLEVISION with a short position of Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of CABLEVISION and Weibo Corp.

Diversification Opportunities for CABLEVISION and Weibo Corp

0.55
  Correlation Coefficient

Very weak diversification

The 3 months correlation between CABLEVISION and Weibo is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CABLEVISION LIGHTPATH LLC and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and CABLEVISION 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 CABLEVISION LIGHTPATH LLC 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 CABLEVISION i.e., CABLEVISION and Weibo Corp go up and down completely randomly.

Pair Corralation between CABLEVISION and Weibo Corp

Assuming the 90 days trading horizon CABLEVISION LIGHTPATH LLC is expected to under-perform the Weibo Corp. But the bond apears to be less risky and, when comparing its historical volatility, CABLEVISION LIGHTPATH LLC is 1.23 times less risky than Weibo Corp. The bond trades about -0.27 of its potential returns per unit of risk. The Weibo Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  916.00  in Weibo Corp on August 31, 2024 and sell it today you would earn a total of  30.00  from holding Weibo Corp or generate 3.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy77.27%
ValuesDaily Returns

CABLEVISION LIGHTPATH LLC  vs.  Weibo Corp

 Performance 
       Timeline  
CABLEVISION LIGHTPATH LLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CABLEVISION LIGHTPATH LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for CABLEVISION LIGHTPATH LLC investors.
Weibo Corp 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Weibo Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Weibo Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

CABLEVISION and Weibo Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CABLEVISION and Weibo Corp

The main advantage of trading using opposite CABLEVISION and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CABLEVISION 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.
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The idea behind CABLEVISION LIGHTPATH LLC 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.
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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