Correlation Between Sabio Holdings and Zhihu
Can any of the company-specific risk be diversified away by investing in both Sabio Holdings 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 Sabio Holdings and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabio Holdings and Zhihu Inc ADR, you can compare the effects of market volatilities on Sabio Holdings 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 Sabio Holdings with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabio Holdings and Zhihu.
Diversification Opportunities for Sabio Holdings and Zhihu
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sabio and Zhihu is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sabio 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 Sabio Holdings 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 Sabio 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 Sabio Holdings i.e., Sabio Holdings and Zhihu go up and down completely randomly.
Pair Corralation between Sabio Holdings and Zhihu
Assuming the 90 days horizon Sabio Holdings is expected to generate 1.17 times more return on investment than Zhihu. However, Sabio Holdings is 1.17 times more volatile than Zhihu Inc ADR. It trades about 0.0 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.01 per unit of risk. If you would invest 69.00 in Sabio Holdings on August 28, 2024 and sell it today you would lose (30.00) from holding Sabio Holdings or give up 43.48% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sabio Holdings vs. Zhihu Inc ADR
Performance |
Timeline |
Sabio Holdings |
Zhihu Inc ADR |
Sabio Holdings and Zhihu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sabio Holdings and Zhihu
The main advantage of trading using opposite Sabio Holdings and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabio Holdings 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.Sabio Holdings vs. Trivago NV | Sabio Holdings vs. YY Inc Class | Sabio Holdings vs. DouYu International Holdings | Sabio Holdings vs. Tencent Music Entertainment |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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