Correlation Between Maverix Metals and Weibo Corp

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

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

Diversification Opportunities for Maverix Metals and Weibo Corp

0.07

Correlation Coefficient

Maverix Metals  Weibo Corp

Significant diversification

The 3 months correlation between Maverix and Weibo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Maverix Metals and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp and Maverix Metals 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 Maverix Metals are associated (or correlated) with Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of Maverix Metals i.e., Maverix Metals and Weibo Corp go up and down completely randomly.

Pair Corralation between Maverix Metals and Weibo Corp

If you would invest (100.00) in Maverix Metals on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Maverix Metals or generate -100.0% return on investment over 90 days.

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

Maverix Metals  vs.  Weibo Corp

Maverix Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maverix Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Maverix Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Weibo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Weibo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Maverix Metals and Weibo Corp

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

The idea behind Maverix Metals and Weibo Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.