Correlation Between Weibo Corp and Rogers Communications
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Rogers Communications 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 Rogers Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Rogers Communications, you can compare the effects of market volatilities on Weibo Corp and Rogers Communications 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 Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Rogers Communications.
Diversification Opportunities for Weibo Corp and Rogers Communications
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weibo and Rogers is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of Weibo Corp i.e., Weibo Corp and Rogers Communications go up and down completely randomly.
Pair Corralation between Weibo Corp and Rogers Communications
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 2.39 times more return on investment than Rogers Communications. However, Weibo Corp is 2.39 times more volatile than Rogers Communications. It trades about -0.03 of its potential returns per unit of risk. Rogers Communications is currently generating about -0.07 per unit of risk. If you would invest 1,926 in Weibo Corp on November 1, 2024 and sell it today you would lose (892.00) from holding Weibo Corp or give up 46.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Weibo Corp vs. Rogers Communications
Performance |
| Timeline |
| Weibo Corp |
| Rogers Communications |
Weibo Corp and Rogers Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Rogers Communications
The main advantage of trading using opposite Weibo Corp and Rogers Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Rogers Communications 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 Rogers Communications will offset losses from the drop in Rogers Communications' long position.| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
| Rogers Communications vs. BCE Inc | Rogers Communications vs. America Movil SAB | Rogers Communications vs. Telus Corp | Rogers Communications vs. Vodafone Group PLC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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