Correlation Between Weave Communications and So Young

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

By analyzing existing cross correlation between Weave Communications and So Young International, you can compare the effects of market volatilities on Weave Communications and So Young 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 Weave Communications with a short position of So Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weave Communications and So Young.

Diversification Opportunities for Weave Communications and So Young

-0.31

Correlation Coefficient

Weave Communications  So Young

Very good diversification

The 3 months correlation between Weave and So Young is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Weave Communications and So Young International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on So Young International and Weave Communications 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 Weave Communications are associated (or correlated) with So Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of So Young International has no effect on the direction of Weave Communications i.e., Weave Communications and So Young go up and down completely randomly.

Pair Corralation between Weave Communications and So Young

Given the investment horizon of 90 days Weave Communications is expected to under-perform the So Young. But the stock apears to be less risky and, when comparing its historical volatility, Weave Communications is 1.15 times less risky than So Young. The stock trades about -0.17 of its potential returns per unit of risk. The So Young International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  78.00  in So Young International on December 28, 2024 and sell it today you would earn a total of  7.88  from holding So Young International or generate 10.1% return on investment over 90 days.

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

Weave Communications  vs.  So Young International

Weave Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Weave Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

So Young International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in So Young International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, So Young showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Weave Communications and So Young

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

The idea behind Weave Communications and So Young International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.