Correlation Between GENERAL and Bilibili

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

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

Diversification Opportunities for GENERAL and Bilibili

0.17

Correlation Coefficient

GENERAL  Bilibili

Average diversification

The 3 months correlation between GENERAL and Bilibili is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GENERAL ELEC CAP and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili and GENERAL 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 GENERAL ELEC CAP are associated (or correlated) with Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of GENERAL i.e., GENERAL and Bilibili go up and down completely randomly.

Pair Corralation between GENERAL and Bilibili

Assuming the 90 days trading horizon GENERAL ELEC CAP is expected to generate 0.17 times more return on investment than Bilibili. However, GENERAL ELEC CAP is 5.93 times less risky than Bilibili. It trades about -0.16 of its potential returns per unit of risk. Bilibili is currently generating about -0.12 per unit of risk. If you would invest  9,789  in GENERAL ELEC CAP on October 11, 2024 and sell it today you would lose (257.00) from holding GENERAL ELEC CAP or give up 2.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	46.34%
Values	Daily Returns

GENERAL ELEC CAP  vs.  Bilibili

GENERAL ELEC CAP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GENERAL ELEC CAP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for GENERAL ELEC CAP investors.

Bilibili

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bilibili has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with GENERAL and Bilibili

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

The idea behind GENERAL ELEC CAP and Bilibili 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.