Correlation Between Weibo Corp and China Resources
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and China Resources Power, you can compare the effects of market volatilities on Weibo Corp and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and China Resources.
Diversification Opportunities for Weibo Corp and China Resources
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Weibo and China is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and China Resources Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Power 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Power has no effect on the direction of Weibo Corp i.e., Weibo Corp and China Resources go up and down completely randomly.
Pair Corralation between Weibo Corp and China Resources
If you would invest 819.00 in Weibo Corp on September 14, 2024 and sell it today you would earn a total of 227.00 from holding Weibo Corp or generate 27.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. China Resources Power
Performance |
| Timeline |
| Weibo Corp |
| China Resources Power |
Weibo Corp and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and China Resources
The main advantage of trading using opposite Weibo Corp and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
| China Resources vs. Weibo Corp | China Resources vs. Radcom | China Resources vs. Tesla Inc | China Resources vs. Cars Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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