Correlation Between BCB Bancorp and Zhihu
Can any of the company-specific risk be diversified away by investing in both BCB Bancorp 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 BCB Bancorp and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCB Bancorp and Zhihu Inc ADR, you can compare the effects of market volatilities on BCB Bancorp 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 BCB Bancorp with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCB Bancorp and Zhihu.
Diversification Opportunities for BCB Bancorp and Zhihu
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between BCB and Zhihu is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp 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 BCB Bancorp 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 BCB Bancorp 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 BCB Bancorp i.e., BCB Bancorp and Zhihu go up and down completely randomly.
Pair Corralation between BCB Bancorp and Zhihu
Given the investment horizon of 90 days BCB Bancorp is expected to generate 0.57 times more return on investment than Zhihu. However, BCB Bancorp is 1.75 times less risky than Zhihu. It trades about -0.01 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.01 per unit of risk. If you would invest 1,683 in BCB Bancorp on September 3, 2024 and sell it today you would lose (356.00) from holding BCB Bancorp or give up 21.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCB Bancorp vs. Zhihu Inc ADR
Performance |
| Timeline |
| BCB Bancorp |
| Zhihu Inc ADR |
BCB Bancorp and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCB Bancorp and Zhihu
The main advantage of trading using opposite BCB Bancorp and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCB Bancorp 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.| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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