Correlation Between Weibo Corp and BCB Bancorp

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

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

Diversification Opportunities for Weibo Corp and BCB Bancorp

-0.28

Correlation Coefficient

Weibo Corp  BCB Bancorp

Very good diversification

The 3 months correlation between Weibo and BCB is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp 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 BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of Weibo Corp i.e., Weibo Corp and BCB Bancorp go up and down completely randomly.

Pair Corralation between Weibo Corp and BCB Bancorp

Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.19 times more return on investment than BCB Bancorp. However, Weibo Corp is 1.19 times more volatile than BCB Bancorp. It trades about -0.02 of its potential returns per unit of risk. BCB Bancorp is currently generating about -0.06 per unit of risk. If you would invest  970.00  in Weibo Corp on October 12, 2024 and sell it today you would lose (58.00) from holding Weibo Corp or give up 5.98% of portfolio value over 90 days.

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

Weibo Corp  vs.  BCB Bancorp

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 somewhat strong fundamental drivers, Weibo Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BCB Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Weibo Corp and BCB Bancorp

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

The idea behind Weibo Corp and BCB Bancorp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.