Correlation Between Kanzhun and YY
Can any of the company-specific risk be diversified away by investing in both Kanzhun and YY 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 YY 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 YY Inc Class, you can compare the effects of market volatilities on Kanzhun and YY 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 YY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kanzhun and YY.
Diversification Opportunities for Kanzhun and YY
Poor diversification
The 3 months correlation between Kanzhun and YY is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and YY Inc Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YY Inc Class 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 YY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YY Inc Class has no effect on the direction of Kanzhun i.e., Kanzhun and YY go up and down completely randomly.
Pair Corralation between Kanzhun and YY
Allowing for the 90-day total investment horizon Kanzhun is expected to generate 4.2 times less return on investment than YY. In addition to that, Kanzhun is 1.5 times more volatile than YY Inc Class. It trades about 0.01 of its total potential returns per unit of risk. YY Inc Class is currently generating about 0.05 per unit of volatility. If you would invest 3,017 in YY Inc Class on November 19, 2024 and sell it today you would earn a total of 1,698 from holding YY Inc Class or generate 56.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kanzhun Ltd ADR vs. YY Inc Class
Performance |
| Timeline |
| Kanzhun Ltd ADR |
| YY Inc Class |
Kanzhun and YY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kanzhun and YY
The main advantage of trading using opposite Kanzhun and YY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kanzhun position performs unexpectedly, YY 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 YY will offset losses from the drop in YY's long position.| Kanzhun vs. Ziprecruiter | Kanzhun vs. Automatic Data Processing | Kanzhun vs. Robert Half International | Kanzhun vs. TrueBlue |
| YY vs. Weibo Corp | YY vs. DouYu International Holdings | YY vs. Tencent Music Entertainment | YY vs. Autohome |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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