Correlation Between Weibo Corp and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Maanshan Iron 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 Maanshan Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Maanshan Iron Steel, you can compare the effects of market volatilities on Weibo Corp and Maanshan Iron 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 Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Maanshan Iron.
Diversification Opportunities for Weibo Corp and Maanshan Iron
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weibo and Maanshan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel 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 Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Weibo Corp i.e., Weibo Corp and Maanshan Iron go up and down completely randomly.
Pair Corralation between Weibo Corp and Maanshan Iron
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.73 times more return on investment than Maanshan Iron. However, Weibo Corp is 1.37 times less risky than Maanshan Iron. It trades about -0.01 of its potential returns per unit of risk. Maanshan Iron Steel is currently generating about -0.01 per unit of risk. If you would invest 1,263 in Weibo Corp on August 31, 2024 and sell it today you would lose (303.00) from holding Weibo Corp or give up 23.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Weibo Corp vs. Maanshan Iron Steel
Performance |
| Timeline |
| Weibo Corp |
| Maanshan Iron Steel |
Weibo Corp and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Maanshan Iron
The main advantage of trading using opposite Weibo Corp and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Maanshan Iron 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 Maanshan Iron will offset losses from the drop in Maanshan Iron'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 |
| Maanshan Iron vs. Olympic Steel | Maanshan Iron vs. POSCO Holdings | Maanshan Iron vs. Steel Dynamics | Maanshan Iron vs. Universal Stainless Alloy |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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