Correlation Between Yunji and Zhihu
Can any of the company-specific risk be diversified away by investing in both Yunji 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 Yunji and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yunji Inc and Zhihu Inc ADR, you can compare the effects of market volatilities on Yunji 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 Yunji with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunji and Zhihu.
Diversification Opportunities for Yunji and Zhihu
Very weak diversification
The 3 months correlation between Yunji and Zhihu is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Yunji Inc 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 Yunji 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 Yunji Inc 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 Yunji i.e., Yunji and Zhihu go up and down completely randomly.
Pair Corralation between Yunji and Zhihu
Allowing for the 90-day total investment horizon Yunji Inc is expected to under-perform the Zhihu. In addition to that, Yunji is 1.32 times more volatile than Zhihu Inc ADR. It trades about -0.09 of its total potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.02 per unit of volatility. If you would invest 385.00 in Zhihu Inc ADR on August 29, 2024 and sell it today you would lose (3.00) from holding Zhihu Inc ADR or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunji Inc vs. Zhihu Inc ADR
Performance |
| Timeline |
| Yunji Inc |
| Zhihu Inc ADR |
Yunji and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunji and Zhihu
The main advantage of trading using opposite Yunji and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunji 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.| Yunji vs. Jeffs Brands | Yunji vs. Jumia Technologies AG | Yunji vs. Kidpik Corp | Yunji vs. Qurate Retail Series |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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