Correlation Between Weibo Corp and Acm Research

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

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

Diversification Opportunities for Weibo Corp and Acm Research

0.04

Correlation Coefficient

Weibo Corp  Acm Research

Significant diversification

The 3 months correlation between Weibo and Acm is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Acm Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acm Research 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 Acm Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acm Research has no effect on the direction of Weibo Corp i.e., Weibo Corp and Acm Research go up and down completely randomly.

Pair Corralation between Weibo Corp and Acm Research

Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 15.6 times less return on investment than Acm Research. But when comparing it to its historical volatility, Weibo Corp is 1.61 times less risky than Acm Research. It trades about 0.0 of its potential returns per unit of risk. Acm Research is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,862  in Acm Research on September 26, 2024 and sell it today you would lose (333.00) from holding Acm Research or give up 17.88% of portfolio value over 90 days.

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

Weibo Corp  vs.  Acm Research

Weibo Corp

Risk-Adjusted Performance

3 of 100

Modest

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

Acm Research

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acm Research has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Weibo Corp and Acm Research

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

The idea behind Weibo Corp and Acm Research 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.