Correlation Between Neogen and Zhihu
Can any of the company-specific risk be diversified away by investing in both Neogen 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 Neogen and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neogen and Zhihu Inc ADR, you can compare the effects of market volatilities on Neogen 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 Neogen with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neogen and Zhihu.
Diversification Opportunities for Neogen and Zhihu
Very good diversification
The 3 months correlation between Neogen and Zhihu is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Neogen 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 Neogen 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 Neogen 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 Neogen i.e., Neogen and Zhihu go up and down completely randomly.
Pair Corralation between Neogen and Zhihu
Given the investment horizon of 90 days Neogen is expected to generate 0.7 times more return on investment than Zhihu. However, Neogen is 1.43 times less risky than Zhihu. It trades about -0.01 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.02 per unit of risk. If you would invest 1,886 in Neogen on August 31, 2024 and sell it today you would lose (468.00) from holding Neogen or give up 24.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neogen vs. Zhihu Inc ADR
Performance |
| Timeline |
| Neogen |
| Zhihu Inc ADR |
Neogen and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neogen and Zhihu
The main advantage of trading using opposite Neogen and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neogen 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.| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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