Correlation Between RadNet and Zhihu
Can any of the company-specific risk be diversified away by investing in both RadNet 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 RadNet and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and Zhihu Inc ADR, you can compare the effects of market volatilities on RadNet 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 RadNet with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and Zhihu.
Diversification Opportunities for RadNet and Zhihu
Significant diversification
The 3 months correlation between RadNet and Zhihu is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding RadNet 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 RadNet 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 RadNet 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 RadNet i.e., RadNet and Zhihu go up and down completely randomly.
Pair Corralation between RadNet and Zhihu
Given the investment horizon of 90 days RadNet Inc is expected to generate 1.01 times more return on investment than Zhihu. However, RadNet is 1.01 times more volatile than Zhihu Inc ADR. It trades about 0.24 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 6,654 in RadNet Inc on September 2, 2024 and sell it today you would earn a total of 1,522 from holding RadNet Inc or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. Zhihu Inc ADR
Performance |
| Timeline |
| RadNet Inc |
| Zhihu Inc ADR |
RadNet and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and Zhihu
The main advantage of trading using opposite RadNet and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet 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.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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