Correlation Between Weibo Corp and Shutterstock
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Shutterstock 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 Shutterstock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Shutterstock, you can compare the effects of market volatilities on Weibo Corp and Shutterstock 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 Shutterstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Shutterstock.
Diversification Opportunities for Weibo Corp and Shutterstock
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weibo and Shutterstock is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Shutterstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shutterstock 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 Shutterstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shutterstock has no effect on the direction of Weibo Corp i.e., Weibo Corp and Shutterstock go up and down completely randomly.
Pair Corralation between Weibo Corp and Shutterstock
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.2 times more return on investment than Shutterstock. However, Weibo Corp is 1.2 times more volatile than Shutterstock. It trades about 0.04 of its potential returns per unit of risk. Shutterstock is currently generating about -0.05 per unit of risk. If you would invest 928.00 in Weibo Corp on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Weibo Corp or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Weibo Corp vs. Shutterstock
Performance |
| Timeline |
| Weibo Corp |
| Shutterstock |
Weibo Corp and Shutterstock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Shutterstock
The main advantage of trading using opposite Weibo Corp and Shutterstock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Shutterstock 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 Shutterstock will offset losses from the drop in Shutterstock'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 |
| Shutterstock vs. Yelp Inc | Shutterstock vs. Match Group | Shutterstock vs. Snap Inc | Shutterstock vs. Onfolio Holdings |
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 Stocks Directory module to find actively traded stocks across global markets.
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