Correlation Between WEBTOON Entertainment and Zhihu
Can any of the company-specific risk be diversified away by investing in both WEBTOON Entertainment 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 WEBTOON Entertainment and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WEBTOON Entertainment Common and Zhihu Inc ADR, you can compare the effects of market volatilities on WEBTOON Entertainment 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 WEBTOON Entertainment with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEBTOON Entertainment and Zhihu.
Diversification Opportunities for WEBTOON Entertainment and Zhihu
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between WEBTOON and Zhihu is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding WEBTOON Entertainment Common 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 WEBTOON Entertainment 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 WEBTOON Entertainment Common 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 WEBTOON Entertainment i.e., WEBTOON Entertainment and Zhihu go up and down completely randomly.
Pair Corralation between WEBTOON Entertainment and Zhihu
Given the investment horizon of 90 days WEBTOON Entertainment Common is expected to generate 0.93 times more return on investment than Zhihu. However, WEBTOON Entertainment Common is 1.08 times less risky than Zhihu. It trades about 0.18 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.11 per unit of risk. If you would invest 1,104 in WEBTOON Entertainment Common on September 4, 2024 and sell it today you would earn a total of 158.00 from holding WEBTOON Entertainment Common or generate 14.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEBTOON Entertainment Common vs. Zhihu Inc ADR
Performance |
| Timeline |
| WEBTOON Entertainment |
| Zhihu Inc ADR |
WEBTOON Entertainment and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEBTOON Entertainment and Zhihu
The main advantage of trading using opposite WEBTOON Entertainment and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEBTOON Entertainment 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.| WEBTOON Entertainment vs. Zhihu Inc ADR | WEBTOON Entertainment vs. NL Industries | WEBTOON Entertainment vs. Sphere Entertainment Co | WEBTOON Entertainment vs. Weibo Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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