Correlation Between Weibo Corp and Phoenix New
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Phoenix New 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 Phoenix New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Phoenix New Media, you can compare the effects of market volatilities on Weibo Corp and Phoenix New 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 Phoenix New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Phoenix New.
Diversification Opportunities for Weibo Corp and Phoenix New
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Weibo and Phoenix is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Phoenix New Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix New Media 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 Phoenix New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix New Media has no effect on the direction of Weibo Corp i.e., Weibo Corp and Phoenix New go up and down completely randomly.
Pair Corralation between Weibo Corp and Phoenix New
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.66 times more return on investment than Phoenix New. However, Weibo Corp is 1.53 times less risky than Phoenix New. It trades about -0.04 of its potential returns per unit of risk. Phoenix New Media is currently generating about -0.1 per unit of risk. If you would invest 927.00 in Weibo Corp on August 26, 2024 and sell it today you would lose (35.00) from holding Weibo Corp or give up 3.78% 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. Phoenix New Media
Performance |
| Timeline |
| Weibo Corp |
| Phoenix New Media |
Weibo Corp and Phoenix New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Phoenix New
The main advantage of trading using opposite Weibo Corp and Phoenix New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Phoenix New 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 Phoenix New will offset losses from the drop in Phoenix New's long position.| Weibo Corp vs. Alphabet Inc Class C | Weibo Corp vs. Twilio Inc | Weibo Corp vs. Snap Inc | Weibo Corp vs. Baidu Inc |
| Phoenix New vs. Alphabet Inc Class C | Phoenix New vs. Twilio Inc | Phoenix New vs. Snap Inc | Phoenix New vs. Baidu 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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