Correlation Between Bilibili and NOHO

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

By analyzing existing cross correlation between Bilibili and NOHO Inc, you can compare the effects of market volatilities on Bilibili and NOHO 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 Bilibili with a short position of NOHO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bilibili and NOHO.

Diversification Opportunities for Bilibili and NOHO

0.16

Correlation Coefficient

Bilibili  NOHO

Average diversification

The 3 months correlation between Bilibili and NOHO is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and NOHO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOHO Inc and Bilibili 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 Bilibili are associated (or correlated) with NOHO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOHO Inc has no effect on the direction of Bilibili i.e., Bilibili and NOHO go up and down completely randomly.

Pair Corralation between Bilibili and NOHO

Given the investment horizon of 90 days Bilibili is expected to generate 60.32 times less return on investment than NOHO. But when comparing it to its historical volatility, Bilibili is 11.53 times less risky than NOHO. It trades about 0.04 of its potential returns per unit of risk. NOHO Inc is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  0.01  in NOHO Inc on December 28, 2024 and sell it today you would earn a total of  0.01  from holding NOHO Inc or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bilibili  vs.  NOHO Inc

Bilibili

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bilibili are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak essential indicators, Bilibili may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NOHO Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NOHO Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, NOHO disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bilibili and NOHO

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

The idea behind Bilibili and NOHO Inc 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.