Correlation Between Weibo Corp and Imax Corp
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Imax Corp 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 Imax Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Imax Corp, you can compare the effects of market volatilities on Weibo Corp and Imax Corp 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 Imax Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Imax Corp.
Diversification Opportunities for Weibo Corp and Imax Corp
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Weibo and Imax is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Imax Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imax Corp 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 Imax Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imax Corp has no effect on the direction of Weibo Corp i.e., Weibo Corp and Imax Corp go up and down completely randomly.
Pair Corralation between Weibo Corp and Imax Corp
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.53 times more return on investment than Imax Corp. However, Weibo Corp is 1.53 times more volatile than Imax Corp. It trades about 0.12 of its potential returns per unit of risk. Imax Corp is currently generating about -0.18 per unit of risk. If you would invest 928.00 in Weibo Corp on November 3, 2024 and sell it today you would earn a total of 54.00 from holding Weibo Corp or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Imax Corp
Performance |
| Timeline |
| Weibo Corp |
| Imax Corp |
Weibo Corp and Imax Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Imax Corp
The main advantage of trading using opposite Weibo Corp and Imax Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Imax Corp 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 Imax Corp will offset losses from the drop in Imax Corp'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 |
| Imax Corp vs. Marcus | Imax Corp vs. Dave Busters Entertainment | Imax Corp vs. AMC Networks | Imax Corp vs. News Corp A |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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