Correlation Between Weibo Corp and GrubHub
Can any of the company-specific risk be diversified away by investing in both Weibo Corp and GrubHub 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 GrubHub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weibo Corp and GrubHub, you can compare the effects of market volatilities on Weibo Corp and GrubHub 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 GrubHub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weibo Corp and GrubHub.
Diversification Opportunities for Weibo Corp and GrubHub
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Weibo and GrubHub is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp and GrubHub in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrubHub 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 GrubHub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrubHub has no effect on the direction of Weibo Corp i.e., Weibo Corp and GrubHub go up and down completely randomly.
Pair Corralation between Weibo Corp and GrubHub
If you would invest 401.00 in GrubHub on January 20, 2024 and sell it today you would earn a total of 0.00 from holding GrubHub or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Weibo Corp vs. GrubHub
Performance |
| Timeline |
| Weibo Corp |
| GrubHub |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Weibo Corp and GrubHub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weibo Corp and GrubHub
The main advantage of trading using opposite Weibo Corp and GrubHub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp position performs unexpectedly, GrubHub 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 GrubHub will offset losses from the drop in GrubHub's long position.The idea behind Weibo Corp and GrubHub 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.| GrubHub vs. LanzaTech Global | GrubHub vs. Braskem SA Class | GrubHub vs. Enersys | GrubHub vs. Sensient Technologies |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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