Correlation Between Bilibili and ENTERGY

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

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

Diversification Opportunities for Bilibili and ENTERGY

0.64

Correlation Coefficient

Bilibili  ENTERGY

Poor diversification

The 3 months correlation between Bilibili and ENTERGY is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and ENTERGY TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTERGY TEX 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 ENTERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTERGY TEX INC has no effect on the direction of Bilibili i.e., Bilibili and ENTERGY go up and down completely randomly.

Pair Corralation between Bilibili and ENTERGY

Given the investment horizon of 90 days Bilibili is expected to generate 8.89 times more return on investment than ENTERGY. However, Bilibili is 8.89 times more volatile than ENTERGY TEX INC. It trades about 0.03 of its potential returns per unit of risk. ENTERGY TEX INC is currently generating about 0.02 per unit of risk. If you would invest  1,936  in Bilibili on December 25, 2024 and sell it today you would earn a total of  51.00  from holding Bilibili or generate 2.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	74.58%
Values	Daily Returns

Bilibili  vs.  ENTERGY TEX INC

Bilibili

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bilibili are ranked lower than 2 (%) 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.

ENTERGY TEX INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ENTERGY TEX INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ENTERGY is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bilibili and ENTERGY

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

The idea behind Bilibili and ENTERGY TEX 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.

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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.