Correlation Between Weibo Corp and Snap
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Snap 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 Snap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Snap Inc, you can compare the effects of market volatilities on Weibo Corp and Snap 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 Snap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Snap.
Diversification Opportunities for Weibo Corp and Snap
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weibo and Snap is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Snap Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snap Inc 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 Snap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snap Inc has no effect on the direction of Weibo Corp i.e., Weibo Corp and Snap go up and down completely randomly.
Pair Corralation between Weibo Corp and Snap
Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the Snap. But the stock apears to be less risky and, when comparing its historical volatility, Weibo Corp is 1.22 times less risky than Snap. The stock trades about -0.01 of its potential returns per unit of risk. The Snap Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 942.00 in Snap Inc on August 27, 2024 and sell it today you would earn a total of 200.00 from holding Snap Inc or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Snap Inc
Performance |
| Timeline |
| Weibo Corp |
| Snap Inc |
Weibo Corp and Snap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Snap
The main advantage of trading using opposite Weibo Corp and Snap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Snap 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 Snap will offset losses from the drop in Snap'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 |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |