Correlation Between Weibo Corp and Ramaco Resources

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

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

Diversification Opportunities for Weibo Corp and Ramaco Resources

-0.13

Correlation Coefficient

Weibo Corp  Ramaco Resources

Good diversification

The 3 months correlation between Weibo and Ramaco is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and Ramaco Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramaco Resources 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 Ramaco Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramaco Resources has no effect on the direction of Weibo Corp i.e., Weibo Corp and Ramaco Resources go up and down completely randomly.

Pair Corralation between Weibo Corp and Ramaco Resources

Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.21 times more return on investment than Ramaco Resources. However, Weibo Corp is 1.21 times more volatile than Ramaco Resources. It trades about 0.04 of its potential returns per unit of risk. Ramaco Resources is currently generating about 0.0 per unit of risk. If you would invest  827.00  in Weibo Corp on October 7, 2024 and sell it today you would earn a total of  99.00  from holding Weibo Corp or generate 11.97% 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.  Ramaco Resources

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 weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ramaco Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ramaco Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Ramaco Resources is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Weibo Corp and Ramaco Resources

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

The idea behind Weibo Corp and Ramaco Resources 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 Anywhere module to track or share privately all of your investments from the convenience of any device.