Correlation Between Weibo Corp and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Kenon 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 Kenon 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 Kenon Holdings, you can compare the effects of market volatilities on Weibo Corp and Kenon 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 Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Kenon Holdings.
Diversification Opportunities for Weibo Corp and Kenon Holdings
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weibo and Kenon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Weibo Corp i.e., Weibo Corp and Kenon Holdings go up and down completely randomly.
Pair Corralation between Weibo Corp and Kenon Holdings
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 2.62 times more return on investment than Kenon Holdings. However, Weibo Corp is 2.62 times more volatile than Kenon Holdings. It trades about 0.05 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.09 per unit of risk. If you would invest 838.00 in Weibo Corp on August 26, 2024 and sell it today you would earn a total of 54.00 from holding Weibo Corp or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Kenon Holdings
Performance |
| Timeline |
| Weibo Corp |
| Kenon Holdings |
Weibo Corp and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Kenon Holdings
The main advantage of trading using opposite Weibo Corp and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Kenon 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 Kenon Holdings will offset losses from the drop in Kenon 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 |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |