Correlation Between Weibo Corp and Catheter Precision
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Catheter Precision 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 Catheter Precision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Catheter Precision, you can compare the effects of market volatilities on Weibo Corp and Catheter Precision 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 Catheter Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Catheter Precision.
Diversification Opportunities for Weibo Corp and Catheter Precision
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Weibo and Catheter is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Catheter Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catheter Precision 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 Catheter Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catheter Precision has no effect on the direction of Weibo Corp i.e., Weibo Corp and Catheter Precision go up and down completely randomly.
Pair Corralation between Weibo Corp and Catheter Precision
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.48 times more return on investment than Catheter Precision. However, Weibo Corp is 2.07 times less risky than Catheter Precision. It trades about 0.42 of its potential returns per unit of risk. Catheter Precision is currently generating about -0.12 per unit of risk. If you would invest 827.00 in Weibo Corp on September 13, 2024 and sell it today you would earn a total of 218.00 from holding Weibo Corp or generate 26.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weibo Corp vs. Catheter Precision
Performance |
| Timeline |
| Weibo Corp |
| Catheter Precision |
Weibo Corp and Catheter Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and Catheter Precision
The main advantage of trading using opposite Weibo Corp and Catheter Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Catheter Precision 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 Catheter Precision will offset losses from the drop in Catheter Precision'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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