Correlation Between Weibo Corp and Anterix

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

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

Diversification Opportunities for Weibo Corp and Anterix

-0.38

Correlation Coefficient

Weibo Corp  Anterix

Very good diversification

The 3 months correlation between Weibo and Anterix is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Anterix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anterix 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 Anterix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anterix has no effect on the direction of Weibo Corp i.e., Weibo Corp and Anterix go up and down completely randomly.

Pair Corralation between Weibo Corp and Anterix

Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.75 times more return on investment than Anterix. However, Weibo Corp is 1.75 times more volatile than Anterix. It trades about 0.12 of its potential returns per unit of risk. Anterix is currently generating about -0.01 per unit of risk. If you would invest  735.00  in Weibo Corp on September 3, 2024 and sell it today you would earn a total of  225.00  from holding Weibo Corp or generate 30.61% return on investment over 90 days.

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

Weibo Corp  vs.  Anterix

Weibo Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Weibo Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Weibo Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Anterix

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Weibo Corp and Anterix

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

The idea behind Weibo Corp and Anterix 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.