Correlation Between Village Super and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both Village Super 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 Village Super and Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Village Super Market and Weibo Corp, you can compare the effects of market volatilities on Village Super 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 Village Super with a short position of Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Super and Weibo Corp.
Diversification Opportunities for Village Super and Weibo Corp
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Village and Weibo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and Village Super 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 Village Super Market 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 Village Super i.e., Village Super and Weibo Corp go up and down completely randomly.
Pair Corralation between Village Super and Weibo Corp
Assuming the 90 days horizon Village Super Market is expected to generate 1.14 times more return on investment than Weibo Corp. However, Village Super is 1.14 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 -0.05 per unit of risk. If you would invest 2,986 in Village Super Market on August 28, 2024 and sell it today you would earn a total of 255.00 from holding Village Super Market or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Village Super Market vs. Weibo Corp
Performance |
| Timeline |
| Village Super Market |
| Weibo Corp |
Village Super and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Village Super and Weibo Corp
The main advantage of trading using opposite Village Super and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Super 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.| Village Super vs. Innovative Food Hldg | Village Super vs. Calavo Growers | Village Super vs. The Chefs Warehouse | Village Super vs. AMCON Distributing |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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