Correlation Between Micromobility and Zhihu
Can any of the company-specific risk be diversified away by investing in both Micromobility 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 Micromobility and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micromobility and Zhihu Inc ADR, you can compare the effects of market volatilities on Micromobility 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 Micromobility with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micromobility and Zhihu.
Diversification Opportunities for Micromobility and Zhihu
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Micromobility and Zhihu is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Micromobility 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 Micromobility 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 Micromobility 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 Micromobility i.e., Micromobility and Zhihu go up and down completely randomly.
Pair Corralation between Micromobility and Zhihu
Assuming the 90 days horizon Micromobility is expected to under-perform the Zhihu. In addition to that, Micromobility is 4.72 times more volatile than Zhihu Inc ADR. It trades about -0.08 of its total potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.02 per unit of volatility. If you would invest 642.00 in Zhihu Inc ADR on September 4, 2024 and sell it today you would lose (272.00) from holding Zhihu Inc ADR or give up 42.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.04% |
| Values | Daily Returns |
Micromobility vs. Zhihu Inc ADR
Performance |
| Timeline |
| Micromobility |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Zhihu Inc ADR |
Micromobility and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micromobility and Zhihu
The main advantage of trading using opposite Micromobility and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micromobility 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.| Micromobility vs. Tandy Leather Factory | Micromobility vs. HNI Corp | Micromobility vs. Femasys | Micromobility vs. Duluth Holdings |
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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