Correlation Between Weibo Corp and Kanzhun
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Kanzhun 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 Kanzhun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Kanzhun Ltd ADR, you can compare the effects of market volatilities on Weibo Corp and Kanzhun 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 Kanzhun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Kanzhun.
Diversification Opportunities for Weibo Corp and Kanzhun
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Weibo and Kanzhun is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Kanzhun Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kanzhun Ltd ADR 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 Kanzhun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kanzhun Ltd ADR has no effect on the direction of Weibo Corp i.e., Weibo Corp and Kanzhun go up and down completely randomly.
Pair Corralation between Weibo Corp and Kanzhun
Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the Kanzhun. But the stock apears to be less risky and, when comparing its historical volatility, Weibo Corp is 1.2 times less risky than Kanzhun. The stock trades about -0.02 of its potential returns per unit of risk. The Kanzhun Ltd ADR is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,993 in Kanzhun Ltd ADR on November 19, 2024 and sell it today you would lose (344.00) from holding Kanzhun Ltd ADR or give up 17.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Kanzhun Ltd ADR
Performance |
| Timeline |
| Weibo Corp |
| Kanzhun Ltd ADR |
Weibo Corp and Kanzhun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Kanzhun
The main advantage of trading using opposite Weibo Corp and Kanzhun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Kanzhun 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 Kanzhun will offset losses from the drop in Kanzhun'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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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