Correlation Between Weibo Corp and PVH Corp
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and PVH Corp 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 PVH Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and PVH Corp, you can compare the effects of market volatilities on Weibo Corp and PVH Corp 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 PVH Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and PVH Corp.
Diversification Opportunities for Weibo Corp and PVH Corp
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Weibo and PVH is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and PVH Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVH Corp 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 PVH Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVH Corp has no effect on the direction of Weibo Corp i.e., Weibo Corp and PVH Corp go up and down completely randomly.
Pair Corralation between Weibo Corp and PVH Corp
Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the PVH Corp. In addition to that, Weibo Corp is 1.12 times more volatile than PVH Corp. It trades about -0.3 of its total potential returns per unit of risk. PVH Corp is currently generating about -0.14 per unit of volatility. If you would invest 10,927 in PVH Corp on October 11, 2024 and sell it today you would lose (546.00) from holding PVH Corp or give up 5.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. PVH Corp
Performance |
| Timeline |
| Weibo Corp |
| PVH Corp |
Weibo Corp and PVH Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and PVH Corp
The main advantage of trading using opposite Weibo Corp and PVH Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, PVH Corp 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 PVH Corp will offset losses from the drop in PVH Corp'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 |
| PVH Corp vs. VF Corporation | PVH Corp vs. Levi Strauss Co | PVH Corp vs. Under Armour A | PVH Corp vs. Columbia Sportswear |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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