Correlation Between Zhibao Technology and Zhihu
Can any of the company-specific risk be diversified away by investing in both Zhibao Technology 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 Zhibao Technology and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhibao Technology Class and Zhihu Inc ADR, you can compare the effects of market volatilities on Zhibao Technology 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 Zhibao Technology with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhibao Technology and Zhihu.
Diversification Opportunities for Zhibao Technology and Zhihu
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhibao and Zhihu is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zhibao Technology Class 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 Zhibao Technology 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 Zhibao Technology Class 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 Zhibao Technology i.e., Zhibao Technology and Zhihu go up and down completely randomly.
Pair Corralation between Zhibao Technology and Zhihu
Given the investment horizon of 90 days Zhibao Technology Class is expected to under-perform the Zhihu. In addition to that, Zhibao Technology is 1.15 times more volatile than Zhihu Inc ADR. It trades about -0.23 of its total potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.11 per unit of volatility. If you would invest 341.00 in Zhihu Inc ADR on September 4, 2024 and sell it today you would earn a total of 29.00 from holding Zhihu Inc ADR or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhibao Technology Class vs. Zhihu Inc ADR
Performance |
| Timeline |
| Zhibao Technology Class |
| Zhihu Inc ADR |
Zhibao Technology and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhibao Technology and Zhihu
The main advantage of trading using opposite Zhibao Technology and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhibao Technology 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.| Zhibao Technology vs. Algoma Steel Group | Zhibao Technology vs. Q2 Holdings | Zhibao Technology vs. Grupo Simec SAB | Zhibao Technology vs. Allegheny Technologies Incorporated |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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