Correlation Between Weibo Corp and GEN Restaurant
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and GEN Restaurant 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 GEN Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and GEN Restaurant Group,, you can compare the effects of market volatilities on Weibo Corp and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and GEN Restaurant.
Diversification Opportunities for Weibo Corp and GEN Restaurant
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weibo and GEN is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of Weibo Corp i.e., Weibo Corp and GEN Restaurant go up and down completely randomly.
Pair Corralation between Weibo Corp and GEN Restaurant
Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the GEN Restaurant. But the stock apears to be less risky and, when comparing its historical volatility, Weibo Corp is 16.52 times less risky than GEN Restaurant. The stock trades about -0.01 of its potential returns per unit of risk. The GEN Restaurant Group, is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in GEN Restaurant Group, on September 3, 2024 and sell it today you would earn a total of 848.00 from holding GEN Restaurant Group, or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 73.13% |
| Values | Daily Returns |
Weibo Corp vs. GEN Restaurant Group,
Performance |
| Timeline |
| Weibo Corp |
| GEN Restaurant Group, |
Weibo Corp and GEN Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and GEN Restaurant
The main advantage of trading using opposite Weibo Corp and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant'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 |
| GEN Restaurant vs. SL Green Realty | GEN Restaurant vs. Haverty Furniture Companies | GEN Restaurant vs. FiscalNote Holdings | GEN Restaurant vs. Cadence Design Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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