Correlation Between Weibo Corp and Inno Holdings
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Inno Holdings 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 Inno Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Inno Holdings Common, you can compare the effects of market volatilities on Weibo Corp and Inno Holdings 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 Inno Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Inno Holdings.
Diversification Opportunities for Weibo Corp and Inno Holdings
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weibo and Inno is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Inno Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inno Holdings Common 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 Inno Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inno Holdings Common has no effect on the direction of Weibo Corp i.e., Weibo Corp and Inno Holdings go up and down completely randomly.
Pair Corralation between Weibo Corp and Inno Holdings
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.38 times more return on investment than Inno Holdings. However, Weibo Corp is 2.66 times less risky than Inno Holdings. It trades about 0.15 of its potential returns per unit of risk. Inno Holdings Common is currently generating about 0.02 per unit of risk. If you would invest 726.00 in Weibo Corp on September 12, 2024 and sell it today you would earn a total of 303.00 from holding Weibo Corp or generate 41.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Inno Holdings Common
Performance |
| Timeline |
| Weibo Corp |
| Inno Holdings Common |
Weibo Corp and Inno Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Inno Holdings
The main advantage of trading using opposite Weibo Corp and Inno Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Inno Holdings 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 Inno Holdings will offset losses from the drop in Inno Holdings' 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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