Correlation Between Weibo Corp and GE Vernova
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and GE Vernova 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 GE Vernova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and GE Vernova LLC, you can compare the effects of market volatilities on Weibo Corp and GE Vernova 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 GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and GE Vernova.
Diversification Opportunities for Weibo Corp and GE Vernova
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Weibo and GEV is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova LLC 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 GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of Weibo Corp i.e., Weibo Corp and GE Vernova go up and down completely randomly.
Pair Corralation between Weibo Corp and GE Vernova
Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the GE Vernova. But the stock apears to be less risky and, when comparing its historical volatility, Weibo Corp is 1.13 times less risky than GE Vernova. The stock trades about -0.08 of its potential returns per unit of risk. The GE Vernova LLC is currently generating about 0.52 of returns per unit of risk over similar time horizon. If you would invest 34,729 in GE Vernova LLC on October 25, 2024 and sell it today you would earn a total of 7,981 from holding GE Vernova LLC or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. GE Vernova LLC
Performance |
| Timeline |
| Weibo Corp |
| GE Vernova LLC |
Weibo Corp and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and GE Vernova
The main advantage of trading using opposite Weibo Corp and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, GE Vernova 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 GE Vernova will offset losses from the drop in GE Vernova'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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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