Correlation Between Weibo Corp and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Anheuser Busch 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 Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Anheuser Busch Inbev, you can compare the effects of market volatilities on Weibo Corp and Anheuser Busch 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 Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Anheuser Busch.
Diversification Opportunities for Weibo Corp and Anheuser Busch
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weibo and Anheuser is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev 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 Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Weibo Corp i.e., Weibo Corp and Anheuser Busch go up and down completely randomly.
Pair Corralation between Weibo Corp and Anheuser Busch
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 3.56 times more return on investment than Anheuser Busch. However, Weibo Corp is 3.56 times more volatile than Anheuser Busch Inbev. It trades about 0.42 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.41 per unit of risk. If you would invest 827.00 in Weibo Corp on September 13, 2024 and sell it today you would earn a total of 213.00 from holding Weibo Corp or generate 25.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Weibo Corp |
| Anheuser Busch Inbev |
Weibo Corp and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Anheuser Busch
The main advantage of trading using opposite Weibo Corp and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch'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 |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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