Correlation Between Uni-President China and Zhihu
Can any of the company-specific risk be diversified away by investing in both Uni-President China 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 Uni-President China and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uni President China Holdings and Zhihu Inc ADR, you can compare the effects of market volatilities on Uni-President China 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 Uni-President China with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uni-President China and Zhihu.
Diversification Opportunities for Uni-President China and Zhihu
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Uni-President and Zhihu is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Uni President China 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 Uni-President China 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 Uni President China 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 Uni-President China i.e., Uni-President China and Zhihu go up and down completely randomly.
Pair Corralation between Uni-President China and Zhihu
If you would invest 357.00 in Zhihu Inc ADR on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Zhihu Inc ADR or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Uni President China Holdings vs. Zhihu Inc ADR
Performance |
| Timeline |
| Uni President China |
| Zhihu Inc ADR |
Uni-President China and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uni-President China and Zhihu
The main advantage of trading using opposite Uni-President China and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uni-President China 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.| Uni-President China vs. Zhihu Inc ADR | Uni-President China vs. FiscalNote Holdings | Uni-President China vs. Q2 Holdings | Uni-President China vs. RCS MediaGroup SpA |
| Zhihu vs. Tencent Music Entertainment | Zhihu vs. Weibo Corp | Zhihu vs. DouYu International Holdings | Zhihu vs. Baidu Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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