Correlation Between Kanzhun and Wabash National
Can any of the company-specific risk be diversified away by investing in both Kanzhun and Wabash National 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 Kanzhun and Wabash National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kanzhun Ltd ADR and Wabash National, you can compare the effects of market volatilities on Kanzhun and Wabash National 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 Kanzhun with a short position of Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kanzhun and Wabash National.
Diversification Opportunities for Kanzhun and Wabash National
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kanzhun and Wabash is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National and Kanzhun 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 Kanzhun Ltd ADR are associated (or correlated) with Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of Kanzhun i.e., Kanzhun and Wabash National go up and down completely randomly.
Pair Corralation between Kanzhun and Wabash National
Allowing for the 90-day total investment horizon Kanzhun Ltd ADR is expected to generate 1.76 times more return on investment than Wabash National. However, Kanzhun is 1.76 times more volatile than Wabash National. It trades about -0.01 of its potential returns per unit of risk. Wabash National is currently generating about -0.07 per unit of risk. If you would invest 1,565 in Kanzhun Ltd ADR on August 27, 2024 and sell it today you would lose (289.00) from holding Kanzhun Ltd ADR or give up 18.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kanzhun Ltd ADR vs. Wabash National
Performance |
| Timeline |
| Kanzhun Ltd ADR |
| Wabash National |
Kanzhun and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kanzhun and Wabash National
The main advantage of trading using opposite Kanzhun and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kanzhun position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National's long position.| Kanzhun vs. Ziprecruiter | Kanzhun vs. Automatic Data Processing | Kanzhun vs. Robert Half International | Kanzhun vs. TrueBlue |
| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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