Correlation Between WiMi Hologram and Zhihu
Can any of the company-specific risk be diversified away by investing in both WiMi Hologram 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 WiMi Hologram and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiMi Hologram Cloud and Zhihu Inc ADR, you can compare the effects of market volatilities on WiMi Hologram 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 WiMi Hologram with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiMi Hologram and Zhihu.
Diversification Opportunities for WiMi Hologram and Zhihu
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WiMi and Zhihu is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding WiMi Hologram Cloud 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 WiMi Hologram 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 WiMi Hologram Cloud 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 WiMi Hologram i.e., WiMi Hologram and Zhihu go up and down completely randomly.
Pair Corralation between WiMi Hologram and Zhihu
Given the investment horizon of 90 days WiMi Hologram Cloud is expected to under-perform the Zhihu. But the stock apears to be less risky and, when comparing its historical volatility, WiMi Hologram Cloud is 1.2 times less risky than Zhihu. The stock trades about -0.16 of its potential returns per unit of risk. The Zhihu Inc ADR is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 369.00 in Zhihu Inc ADR on August 29, 2024 and sell it today you would lose (9.00) from holding Zhihu Inc ADR or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiMi Hologram Cloud vs. Zhihu Inc ADR
Performance |
| Timeline |
| WiMi Hologram Cloud |
| Zhihu Inc ADR |
WiMi Hologram and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiMi Hologram and Zhihu
The main advantage of trading using opposite WiMi Hologram and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiMi Hologram 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.| WiMi Hologram vs. ADTRAN Inc | WiMi Hologram vs. Belden Inc | WiMi Hologram vs. ADC Therapeutics SA | WiMi Hologram vs. Comtech Telecommunications 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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