Correlation Between Weibo Corp and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Playa Hotels 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 Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Playa Hotels Resorts, you can compare the effects of market volatilities on Weibo Corp and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Playa Hotels.
Diversification Opportunities for Weibo Corp and Playa Hotels
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Weibo and Playa is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Weibo Corp i.e., Weibo Corp and Playa Hotels go up and down completely randomly.
Pair Corralation between Weibo Corp and Playa Hotels
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.56 times less return on investment than Playa Hotels. In addition to that, Weibo Corp is 1.86 times more volatile than Playa Hotels Resorts. It trades about 0.01 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.02 per unit of volatility. If you would invest 943.00 in Playa Hotels Resorts on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Playa Hotels Resorts or generate 3.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Playa Hotels Resorts
Performance |
| Timeline |
| Weibo Corp |
| Playa Hotels Resorts |
Weibo Corp and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Playa Hotels
The main advantage of trading using opposite Weibo Corp and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
| Playa Hotels vs. Golden Entertainment | Playa Hotels vs. Red Rock Resorts | Playa Hotels vs. Century Casinos | Playa Hotels vs. Studio City International |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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