Correlation Between Weibo Corp and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Beyond Meat 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 Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Beyond Meat, you can compare the effects of market volatilities on Weibo Corp and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Beyond Meat.
Diversification Opportunities for Weibo Corp and Beyond Meat
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Weibo and Beyond is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of Weibo Corp i.e., Weibo Corp and Beyond Meat go up and down completely randomly.
Pair Corralation between Weibo Corp and Beyond Meat
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.65 times more return on investment than Beyond Meat. However, Weibo Corp is 1.53 times less risky than Beyond Meat. It trades about 0.01 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.01 per unit of risk. If you would invest 901.00 in Weibo Corp on August 27, 2024 and sell it today you would lose (9.00) from holding Weibo Corp or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Beyond Meat
Performance |
| Timeline |
| Weibo Corp |
| Beyond Meat |
Weibo Corp and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Beyond Meat
The main advantage of trading using opposite Weibo Corp and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat'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 |
| Beyond Meat vs. Bellring Brands LLC | Beyond Meat vs. Ingredion Incorporated | Beyond Meat vs. Nomad Foods | Beyond Meat vs. Post Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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