Correlation Between Weibo Corp and African Agriculture
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and African Agriculture 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 Weibo Corp and African Agriculture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and African Agriculture Holdings, you can compare the effects of market volatilities on Weibo Corp and African Agriculture 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 Weibo Corp with a short position of African Agriculture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and African Agriculture.
Diversification Opportunities for Weibo Corp and African Agriculture
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weibo and African is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and African Agriculture Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on African Agriculture and Weibo 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 Weibo Corp are associated (or correlated) with African Agriculture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of African Agriculture has no effect on the direction of Weibo Corp i.e., Weibo Corp and African Agriculture go up and down completely randomly.
Pair Corralation between Weibo Corp and African Agriculture
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.15 times more return on investment than African Agriculture. However, Weibo Corp is 6.71 times less risky than African Agriculture. It trades about 0.15 of its potential returns per unit of risk. African Agriculture Holdings is currently generating about -0.33 per unit of risk. If you would invest 726.00 in Weibo Corp on September 12, 2024 and sell it today you would earn a total of 303.00 from holding Weibo Corp or generate 41.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 20.31% |
| Values | Daily Returns |
Weibo Corp vs. African Agriculture Holdings
Performance |
| Timeline |
| Weibo Corp |
| African Agriculture |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Weibo Corp and African Agriculture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and African Agriculture
The main advantage of trading using opposite Weibo Corp and African Agriculture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, African Agriculture 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 African Agriculture will offset losses from the drop in African Agriculture's long position.| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
| African Agriculture vs. Trupanion | African Agriculture vs. Employers Holdings | African Agriculture vs. Sligro Food Group | African Agriculture vs. Siriuspoint |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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