Correlation Between Skillz Platform and Bilibili

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

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

Diversification Opportunities for Skillz Platform and Bilibili

-0.51

Correlation Coefficient

Skillz Platform  Bilibili

Excellent diversification

The 3 months correlation between Skillz and Bilibili is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Skillz Platform and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili and Skillz Platform 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 Skillz Platform are associated (or correlated) with Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Skillz Platform i.e., Skillz Platform and Bilibili go up and down completely randomly.

Pair Corralation between Skillz Platform and Bilibili

Given the investment horizon of 90 days Skillz Platform is expected to under-perform the Bilibili. But the stock apears to be less risky and, when comparing its historical volatility, Skillz Platform is 3.77 times less risky than Bilibili. The stock trades about -0.09 of its potential returns per unit of risk. The Bilibili is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,541  in Bilibili on July 14, 2024 and sell it today you would earn a total of  723.00  from holding Bilibili or generate 46.92% return on investment over 90 days.

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

Skillz Platform  vs.  Bilibili

Skillz Platform

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Skillz Platform has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in November 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Bilibili

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bilibili are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak essential indicators, Bilibili demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Skillz Platform and Bilibili

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

The idea behind Skillz Platform and Bilibili 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.