Correlation Between Peoples Educational and Zhihu
Can any of the company-specific risk be diversified away by investing in both Peoples Educational 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 Peoples Educational and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peoples Educational Holdings and Zhihu Inc ADR, you can compare the effects of market volatilities on Peoples Educational 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 Peoples Educational with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Educational and Zhihu.
Diversification Opportunities for Peoples Educational and Zhihu
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Peoples and Zhihu is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Peoples Educational Holdings 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 Peoples Educational 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 Peoples Educational Holdings 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 Peoples Educational i.e., Peoples Educational and Zhihu go up and down completely randomly.
Pair Corralation between Peoples Educational and Zhihu
Given the investment horizon of 90 days Peoples Educational Holdings is expected to under-perform the Zhihu. In addition to that, Peoples Educational is 2.58 times more volatile than Zhihu Inc ADR. It trades about -0.21 of its total potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.16 per unit of volatility. If you would invest 334.00 in Zhihu Inc ADR on September 12, 2024 and sell it today you would earn a total of 46.00 from holding Zhihu Inc ADR or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peoples Educational Holdings vs. Zhihu Inc ADR
Performance |
| Timeline |
| Peoples Educational |
| Zhihu Inc ADR |
Peoples Educational and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peoples Educational and Zhihu
The main advantage of trading using opposite Peoples Educational and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peoples Educational 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.| Peoples Educational vs. Papaya Growth Opportunity | Peoples Educational vs. HUMANA INC | Peoples Educational vs. Barloworld Ltd ADR | Peoples Educational vs. Morningstar Unconstrained Allocation |
| Zhihu vs. Twilio Inc | Zhihu vs. Meta Platforms | Zhihu vs. Alphabet Inc Class C | Zhihu vs. Alphabet Inc Class A |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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