Correlation Between 55300RAB7 and Zhihu
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By analyzing existing cross correlation between MGM China Holdings and Zhihu Inc ADR, you can compare the effects of market volatilities on 55300RAB7 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 55300RAB7 with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of 55300RAB7 and Zhihu.
Diversification Opportunities for 55300RAB7 and Zhihu
Significant diversification
The 3 months correlation between 55300RAB7 and Zhihu is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MGM 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 55300RAB7 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 MGM 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 55300RAB7 i.e., 55300RAB7 and Zhihu go up and down completely randomly.
Pair Corralation between 55300RAB7 and Zhihu
Assuming the 90 days trading horizon MGM China Holdings is expected to generate 0.08 times more return on investment than Zhihu. However, MGM China Holdings is 13.29 times less risky than Zhihu. It trades about 0.04 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.04 per unit of risk. If you would invest 9,725 in MGM China Holdings on September 2, 2024 and sell it today you would earn a total of 165.00 from holding MGM China Holdings or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 55.24% |
| Values | Daily Returns |
MGM China Holdings vs. Zhihu Inc ADR
Performance |
| Timeline |
| MGM China Holdings |
| Zhihu Inc ADR |
55300RAB7 and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 55300RAB7 and Zhihu
The main advantage of trading using opposite 55300RAB7 and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 55300RAB7 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.| 55300RAB7 vs. AEP TEX INC | 55300RAB7 vs. US BANK NATIONAL | 55300RAB7 vs. FactSet Research Systems | 55300RAB7 vs. Golden Agri Resources |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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