Correlation Between Weibo Corp and Cedar Realty
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and Cedar Realty 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 Cedar Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and Cedar Realty Trust, you can compare the effects of market volatilities on Weibo Corp and Cedar Realty 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 Cedar Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and Cedar Realty.
Diversification Opportunities for Weibo Corp and Cedar Realty
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weibo and Cedar is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Cedar Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cedar Realty Trust 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 Cedar Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cedar Realty Trust has no effect on the direction of Weibo Corp i.e., Weibo Corp and Cedar Realty go up and down completely randomly.
Pair Corralation between Weibo Corp and Cedar Realty
Allowing for the 90-day total investment horizon Weibo Corp is expected to under-perform the Cedar Realty. In addition to that, Weibo Corp is 1.05 times more volatile than Cedar Realty Trust. It trades about -0.01 of its total potential returns per unit of risk. Cedar Realty Trust is currently generating about 0.04 per unit of volatility. If you would invest 1,275 in Cedar Realty Trust on December 2, 2024 and sell it today you would earn a total of 455.00 from holding Cedar Realty Trust or generate 35.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Weibo Corp vs. Cedar Realty Trust
Performance |
Timeline |
Weibo Corp |
Cedar Realty Trust |
Weibo Corp and Cedar Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Weibo Corp and Cedar Realty
The main advantage of trading using opposite Weibo Corp and Cedar Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, Cedar Realty 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 Cedar Realty will offset losses from the drop in Cedar Realty's long position.Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
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Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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