Correlation Between Weibo Corp and Kuaishou Technology
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Kuaishou Technology 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 Kuaishou Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Kuaishou Technology, you can compare the effects of market volatilities on Weibo Corp and Kuaishou Technology 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 Kuaishou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Kuaishou Technology.
Diversification Opportunities for Weibo Corp and Kuaishou Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weibo and Kuaishou is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Kuaishou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuaishou Technology 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 Kuaishou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuaishou Technology has no effect on the direction of Weibo Corp i.e., Weibo Corp and Kuaishou Technology go up and down completely randomly.
Pair Corralation between Weibo Corp and Kuaishou Technology
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.97 times more return on investment than Kuaishou Technology. However, Weibo Corp is 1.97 times more volatile than Kuaishou Technology. It trades about 0.03 of its potential returns per unit of risk. Kuaishou Technology is currently generating about -0.12 per unit of risk. If you would invest 921.00 in Weibo Corp on October 25, 2024 and sell it today you would earn a total of 12.00 from holding Weibo Corp or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.86% |
| Values | Daily Returns |
Weibo Corp vs. Kuaishou Technology
Performance |
| Timeline |
| Weibo Corp |
| Kuaishou Technology |
Weibo Corp and Kuaishou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Kuaishou Technology
The main advantage of trading using opposite Weibo Corp and Kuaishou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Kuaishou Technology 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 Kuaishou Technology will offset losses from the drop in Kuaishou Technology'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 |
| Kuaishou Technology vs. Tinybeans Group Limited | Kuaishou Technology vs. DGTL Holdings | Kuaishou Technology vs. Zoomd Technologies | Kuaishou Technology vs. Quizam Media |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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