Correlation Between Mattel and Zhihu
Can any of the company-specific risk be diversified away by investing in both Mattel 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 Mattel and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mattel Inc and Zhihu Inc ADR, you can compare the effects of market volatilities on Mattel 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 Mattel with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mattel and Zhihu.
Diversification Opportunities for Mattel and Zhihu
Average diversification
The 3 months correlation between Mattel and Zhihu is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Mattel Inc 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 Mattel 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 Mattel Inc 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 Mattel i.e., Mattel and Zhihu go up and down completely randomly.
Pair Corralation between Mattel and Zhihu
Considering the 90-day investment horizon Mattel Inc is expected to under-perform the Zhihu. But the stock apears to be less risky and, when comparing its historical volatility, Mattel Inc is 2.02 times less risky than Zhihu. The stock trades about -0.14 of its potential returns per unit of risk. The Zhihu Inc ADR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 357.00 in Zhihu Inc ADR on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Zhihu Inc ADR or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mattel Inc vs. Zhihu Inc ADR
Performance |
| Timeline |
| Mattel Inc |
| Zhihu Inc ADR |
Mattel and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mattel and Zhihu
The main advantage of trading using opposite Mattel and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mattel 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.| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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