Correlation Between Weibo Corp and Fluence Energy
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Fluence Energy 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 Fluence Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Fluence Energy, you can compare the effects of market volatilities on Weibo Corp and Fluence Energy 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 Fluence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Fluence Energy.
Diversification Opportunities for Weibo Corp and Fluence Energy
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Weibo and Fluence is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy 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 Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of Weibo Corp i.e., Weibo Corp and Fluence Energy go up and down completely randomly.
Pair Corralation between Weibo Corp and Fluence Energy
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.6 times more return on investment than Fluence Energy. However, Weibo Corp is 1.67 times less risky than Fluence Energy. It trades about -0.02 of its potential returns per unit of risk. Fluence Energy is currently generating about -0.01 per unit of risk. If you would invest 1,766 in Weibo Corp on November 19, 2024 and sell it today you would lose (656.00) from holding Weibo Corp or give up 37.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Fluence Energy
Performance |
| Timeline |
| Weibo Corp |
| Fluence Energy |
Weibo Corp and Fluence Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Fluence Energy
The main advantage of trading using opposite Weibo Corp and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Fluence Energy 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 Fluence Energy will offset losses from the drop in Fluence Energy'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 |
| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence Energy vs. Advent Technologies 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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