Correlation Between Twitter and Weibo Corp

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

Specify exactly 2 symbols:

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

Diversification Opportunities for Twitter and Weibo Corp

0.76
  Correlation Coefficient
Twitter
Weibo Corp ADR

Poor diversification

The 3 months correlation between Twitter and Weibo is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Twitter and Weibo Corp ADR in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp ADR and Twitter 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 Twitter are associated (or correlated) with Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp ADR has no effect on the direction of Twitter i.e., Twitter and Weibo Corp go up and down completely randomly.

Pair Corralation between Twitter and Weibo Corp

Given the investment horizon of 90 days Twitter is expected to generate 1.08 times more return on investment than Weibo Corp. However, Twitter is 1.08 times more volatile than Weibo Corp ADR. It trades about 0.1 of its potential returns per unit of risk. Weibo Corp ADR is currently generating about 0.07 per unit of risk. If you would invest  3,226  in Twitter on April 28, 2021 and sell it today you would earn a total of  3,607  from holding Twitter or generate 111.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Twitter  vs.  Weibo Corp ADR

 Performance (%) 
      Timeline 
Twitter 
 Twitter Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Twitter are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Twitter may actually be approaching a critical reversion point that can send shares even higher in August 2021.

Twitter Price Channel

Weibo Corp ADR 
 Weibo Performance
0 of 100
Over the last 90 days Weibo Corp ADR 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.

Weibo Price Channel

Twitter and Weibo Corp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Twitter and Weibo Corp

The main advantage of trading using opposite Twitter and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Twitter position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp's long position.
The idea behind Twitter and Weibo Corp ADR 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.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

Other Complementary Tools

Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go