Correlation Between BOS Better and Zhihu
Can any of the company-specific risk be diversified away by investing in both BOS Better 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 BOS Better and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOS Better Online and Zhihu Inc ADR, you can compare the effects of market volatilities on BOS Better 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 BOS Better with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOS Better and Zhihu.
Diversification Opportunities for BOS Better and Zhihu
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between BOS and Zhihu is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BOS Better Online 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 BOS Better 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 BOS Better Online 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 BOS Better i.e., BOS Better and Zhihu go up and down completely randomly.
Pair Corralation between BOS Better and Zhihu
Given the investment horizon of 90 days BOS Better Online is expected to generate 2.17 times more return on investment than Zhihu. However, BOS Better is 2.17 times more volatile than Zhihu Inc ADR. It trades about 0.23 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.12 per unit of risk. If you would invest 334.00 in BOS Better Online on October 23, 2024 and sell it today you would earn a total of 64.00 from holding BOS Better Online or generate 19.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOS Better Online vs. Zhihu Inc ADR
Performance |
| Timeline |
| BOS Better Online |
| Zhihu Inc ADR |
BOS Better and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOS Better and Zhihu
The main advantage of trading using opposite BOS Better and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOS Better 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.| BOS Better vs. KVH Industries | BOS Better vs. Aviat Networks | BOS Better vs. Harmonic | BOS Better vs. Telesat Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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