Correlation Between ANGI Homeservices and Zhihu
Can any of the company-specific risk be diversified away by investing in both ANGI Homeservices and Zhihu 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 ANGI Homeservices and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGI Homeservices and Zhihu Inc ADR, you can compare the effects of market volatilities on ANGI Homeservices and Zhihu 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 ANGI Homeservices with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGI Homeservices and Zhihu.
Diversification Opportunities for ANGI Homeservices and Zhihu
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANGI and Zhihu is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ANGI Homeservices and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR and ANGI Homeservices 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 ANGI Homeservices are associated (or correlated) with Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of ANGI Homeservices i.e., ANGI Homeservices and Zhihu go up and down completely randomly.
Pair Corralation between ANGI Homeservices and Zhihu
Given the investment horizon of 90 days ANGI Homeservices is expected to generate 1.0 times more return on investment than Zhihu. However, ANGI Homeservices is 1.0 times less risky than Zhihu. It trades about 0.02 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.02 per unit of risk. If you would invest 215.00 in ANGI Homeservices on August 24, 2024 and sell it today you would lose (19.00) from holding ANGI Homeservices or give up 8.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGI Homeservices vs. Zhihu Inc ADR
Performance |
| Timeline |
| ANGI Homeservices |
| Zhihu Inc ADR |
ANGI Homeservices and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGI Homeservices and Zhihu
The main advantage of trading using opposite ANGI Homeservices and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGI Homeservices position performs unexpectedly, Zhihu 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 Zhihu will offset losses from the drop in Zhihu's long position.| ANGI Homeservices vs. Match Group | ANGI Homeservices vs. Outbrain | ANGI Homeservices vs. MediaAlpha | ANGI Homeservices vs. YY Inc Class |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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