Correlation Between Weibo Corp and Mazda
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Mazda 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 Mazda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Mazda Motor, you can compare the effects of market volatilities on Weibo Corp and Mazda 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 Mazda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Mazda.
Diversification Opportunities for Weibo Corp and Mazda
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weibo and Mazda is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Mazda Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mazda Motor 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 Mazda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mazda Motor has no effect on the direction of Weibo Corp i.e., Weibo Corp and Mazda go up and down completely randomly.
Pair Corralation between Weibo Corp and Mazda
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.9 times more return on investment than Mazda. However, Weibo Corp is 1.11 times less risky than Mazda. It trades about 0.0 of its potential returns per unit of risk. Mazda Motor is currently generating about -0.02 per unit of risk. If you would invest 1,235 in Weibo Corp on September 4, 2024 and sell it today you would lose (259.00) from holding Weibo Corp or give up 20.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.94% |
| Values | Daily Returns |
Weibo Corp vs. Mazda Motor
Performance |
| Timeline |
| Weibo Corp |
| Mazda Motor |
Weibo Corp and Mazda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Mazda
The main advantage of trading using opposite Weibo Corp and Mazda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Mazda 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 Mazda will offset losses from the drop in Mazda'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 |
| Mazda vs. Porsche Automobil Holding | Mazda vs. Porsche Automobile Holding | Mazda vs. Volkswagen AG 110 | Mazda vs. Bayerische Motoren Werke |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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