Correlation Between YY and Kanzhun
Can any of the company-specific risk be diversified away by investing in both YY and Kanzhun 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 YY and Kanzhun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YY Inc Class and Kanzhun Ltd ADR, you can compare the effects of market volatilities on YY and Kanzhun 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 YY with a short position of Kanzhun. Check out your portfolio center. Please also check ongoing floating volatility patterns of YY and Kanzhun.
Diversification Opportunities for YY and Kanzhun
Average diversification
The 3 months correlation between YY and Kanzhun is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding YY Inc Class and Kanzhun Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kanzhun Ltd ADR and YY 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 YY Inc Class are associated (or correlated) with Kanzhun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kanzhun Ltd ADR has no effect on the direction of YY i.e., YY and Kanzhun go up and down completely randomly.
Pair Corralation between YY and Kanzhun
Allowing for the 90-day total investment horizon YY Inc Class is expected to generate 0.64 times more return on investment than Kanzhun. However, YY Inc Class is 1.55 times less risky than Kanzhun. It trades about -0.06 of its potential returns per unit of risk. Kanzhun Ltd ADR is currently generating about -0.05 per unit of risk. If you would invest 3,633 in YY Inc Class on August 26, 2024 and sell it today you would lose (242.00) from holding YY Inc Class or give up 6.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YY Inc Class vs. Kanzhun Ltd ADR
Performance |
| Timeline |
| YY Inc Class |
| Kanzhun Ltd ADR |
YY and Kanzhun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YY and Kanzhun
The main advantage of trading using opposite YY and Kanzhun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YY position performs unexpectedly, Kanzhun 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 Kanzhun will offset losses from the drop in Kanzhun's long position.The idea behind YY Inc Class and Kanzhun Ltd ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kanzhun vs. Ziprecruiter | Kanzhun vs. Automatic Data Processing | Kanzhun vs. Robert Half International | Kanzhun vs. TrueBlue |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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