Correlation Between Tencent Music and Bilibili
Can any of the company-specific risk be diversified away by investing in both Tencent Music 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 Tencent Music and Bilibili into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tencent Music Entertainment and Bilibili, you can compare the effects of market volatilities on Tencent Music 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 Tencent Music with a short position of Bilibili. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tencent Music and Bilibili.
Diversification Opportunities for Tencent Music and Bilibili
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tencent and Bilibili is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Tencent Music Entertainment and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili and Tencent Music 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 Tencent Music Entertainment 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 Tencent Music i.e., Tencent Music and Bilibili go up and down completely randomly.
Pair Corralation between Tencent Music and Bilibili
Considering the 90-day investment horizon Tencent Music Entertainment is expected to generate 0.78 times more return on investment than Bilibili. However, Tencent Music Entertainment is 1.28 times less risky than Bilibili. It trades about 0.25 of its potential returns per unit of risk. Bilibili is currently generating about 0.14 per unit of risk. If you would invest 1,736 in Tencent Music Entertainment on June 1, 2025 and sell it today you would earn a total of 716.00 from holding Tencent Music Entertainment or generate 41.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tencent Music Entertainment vs. Bilibili
Performance |
| Timeline |
| Tencent Music Entert |
| Bilibili |
Tencent Music and Bilibili Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tencent Music and Bilibili
The main advantage of trading using opposite Tencent Music and Bilibili positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tencent Music 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.| Tencent Music vs. Baidu Inc | Tencent Music vs. DouYu International Holdings | Tencent Music vs. HUYA Inc | Tencent Music vs. iQIYI Inc |
| Bilibili vs. NetEase | Bilibili vs. Roblox Corp | Bilibili vs. Skillz Platform | Bilibili vs. Take Two Interactive Software |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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