Correlation Between Weibo Corp and Hudson Pacific
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Hudson Pacific 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 Hudson Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Hudson Pacific Properties, you can compare the effects of market volatilities on Weibo Corp and Hudson Pacific 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 Hudson Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Hudson Pacific.
Diversification Opportunities for Weibo Corp and Hudson Pacific
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Weibo and Hudson is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific Properties 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 Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of Weibo Corp i.e., Weibo Corp and Hudson Pacific go up and down completely randomly.
Pair Corralation between Weibo Corp and Hudson Pacific
Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 0.97 times more return on investment than Hudson Pacific. However, Weibo Corp is 1.04 times less risky than Hudson Pacific. It trades about 0.25 of its potential returns per unit of risk. Hudson Pacific Properties is currently generating about -0.15 per unit of risk. If you would invest 820.00 in Weibo Corp on February 4, 2024 and sell it today you would earn a total of 147.00 from holding Weibo Corp or generate 17.93% 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. Hudson Pacific Properties
Performance |
Timeline |
Weibo Corp |
Hudson Pacific Properties |
Weibo Corp and Hudson Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Weibo Corp and Hudson Pacific
The main advantage of trading using opposite Weibo Corp and Hudson Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Hudson Pacific 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 Hudson Pacific will offset losses from the drop in Hudson Pacific's long position.Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Baidu Inc |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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