Correlation Between Kanzhun and Zillow Group
Can any of the company-specific risk be diversified away by investing in both Kanzhun and Zillow Group 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 Zillow Group 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 Zillow Group Class, you can compare the effects of market volatilities on Kanzhun and Zillow Group 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 Zillow Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kanzhun and Zillow Group.
Diversification Opportunities for Kanzhun and Zillow Group
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kanzhun and Zillow is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and Zillow Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group 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 Zillow Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zillow Group Class has no effect on the direction of Kanzhun i.e., Kanzhun and Zillow Group go up and down completely randomly.
Pair Corralation between Kanzhun and Zillow Group
Allowing for the 90-day total investment horizon Kanzhun Ltd ADR is expected to under-perform the Zillow Group. But the stock apears to be less risky and, when comparing its historical volatility, Kanzhun Ltd ADR is 2.49 times less risky than Zillow Group. The stock trades about -0.47 of its potential returns per unit of risk. The Zillow Group Class is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 5,832 in Zillow Group Class on August 30, 2024 and sell it today you would earn a total of 2,653 from holding Zillow Group Class or generate 45.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kanzhun Ltd ADR vs. Zillow Group Class
Performance |
| Timeline |
| Kanzhun Ltd ADR |
| Zillow Group Class |
Kanzhun and Zillow Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kanzhun and Zillow Group
The main advantage of trading using opposite Kanzhun and Zillow Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kanzhun position performs unexpectedly, Zillow Group 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 Zillow Group will offset losses from the drop in Zillow Group's long position.| Kanzhun vs. Ziprecruiter | Kanzhun vs. Automatic Data Processing | Kanzhun vs. Robert Half International | Kanzhun vs. TrueBlue |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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