Correlation Between Weibo Corp and Exactus

Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Exactus 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 Exactus into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Weibo Corp and Exactus, you can compare the effects of market volatilities on Weibo Corp and Exactus 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 Exactus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Exactus.

Diversification Opportunities for Weibo Corp and Exactus

0.0

Correlation Coefficient

Weibo Corp  Exactus

Pay attention - limited upside

The 3 months correlation between Weibo and Exactus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Exactus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exactus 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 Exactus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exactus has no effect on the direction of Weibo Corp i.e., Weibo Corp and Exactus go up and down completely randomly.

Pair Corralation between Weibo Corp and Exactus

If you would invest  797.00  in Weibo Corp on February 5, 2024 and sell it today you would earn a total of  170.00  from holding Weibo Corp or generate 21.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Weibo Corp  vs.  Exactus

Weibo Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Weibo Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Weibo Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Exactus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exactus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Exactus is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Weibo Corp and Exactus

The main advantage of trading using opposite Weibo Corp and Exactus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Exactus 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 Exactus will offset losses from the drop in Exactus' long position.

The idea behind Weibo Corp and Exactus pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.