Correlation Between Ispire Technology and Zhihu
Can any of the company-specific risk be diversified away by investing in both Ispire Technology 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 Ispire Technology and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ispire Technology Common and Zhihu Inc ADR, you can compare the effects of market volatilities on Ispire Technology 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 Ispire Technology with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ispire Technology and Zhihu.
Diversification Opportunities for Ispire Technology and Zhihu
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ispire and Zhihu is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ispire Technology Common 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 Ispire Technology 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 Ispire Technology Common 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 Ispire Technology i.e., Ispire Technology and Zhihu go up and down completely randomly.
Pair Corralation between Ispire Technology and Zhihu
Given the investment horizon of 90 days Ispire Technology Common is expected to generate 1.07 times more return on investment than Zhihu. However, Ispire Technology is 1.07 times more volatile than Zhihu Inc ADR. It trades about 0.11 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.03 per unit of risk. If you would invest 561.00 in Ispire Technology Common on September 1, 2024 and sell it today you would earn a total of 53.00 from holding Ispire Technology Common or generate 9.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ispire Technology Common vs. Zhihu Inc ADR
Performance |
| Timeline |
| Ispire Technology Common |
| Zhihu Inc ADR |
Ispire Technology and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ispire Technology and Zhihu
The main advantage of trading using opposite Ispire Technology and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ispire Technology 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.| Ispire Technology vs. Campbell Soup | Ispire Technology vs. ConAgra Foods | Ispire Technology vs. Hormel Foods | Ispire Technology vs. Kellanova |
| Zhihu vs. Tencent Music Entertainment | Zhihu vs. Weibo Corp | Zhihu vs. DouYu International Holdings | Zhihu vs. Baidu Inc |
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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