Correlation Between WELLS and Zhihu
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By analyzing existing cross correlation between WELLS FARGO NEW and Zhihu Inc ADR, you can compare the effects of market volatilities on WELLS 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 WELLS with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of WELLS and Zhihu.
Diversification Opportunities for WELLS and Zhihu
Significant diversification
The 3 months correlation between WELLS and Zhihu is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding WELLS FARGO NEW 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 WELLS 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 WELLS FARGO NEW 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 WELLS i.e., WELLS and Zhihu go up and down completely randomly.
Pair Corralation between WELLS and Zhihu
Assuming the 90 days trading horizon WELLS FARGO NEW is expected to under-perform the Zhihu. But the bond apears to be less risky and, when comparing its historical volatility, WELLS FARGO NEW is 14.0 times less risky than Zhihu. The bond trades about -0.18 of its potential returns per unit of risk. The Zhihu Inc ADR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 356.00 in Zhihu Inc ADR on August 25, 2024 and sell it today you would earn a total of 4.00 from holding Zhihu Inc ADR or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
WELLS FARGO NEW vs. Zhihu Inc ADR
Performance |
| Timeline |
| WELLS FARGO NEW |
| Zhihu Inc ADR |
WELLS and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WELLS and Zhihu
The main advantage of trading using opposite WELLS and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WELLS 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.| WELLS vs. Zhihu Inc ADR | WELLS vs. Alaska Air Group | WELLS vs. WiMi Hologram Cloud | WELLS vs. Air Transport Services |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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