Correlation Between Zhihu and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Zhihu and ANZ Group 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 Zhihu and ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhihu Inc ADR and ANZ Group Holdings, you can compare the effects of market volatilities on Zhihu and ANZ Group 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 Zhihu with a short position of ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and ANZ Group.
Diversification Opportunities for Zhihu and ANZ Group
Very good diversification
The 3 months correlation between Zhihu and ANZ is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings and Zhihu 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 Zhihu Inc ADR are associated (or correlated) with ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Zhihu i.e., Zhihu and ANZ Group go up and down completely randomly.
Pair Corralation between Zhihu and ANZ Group
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 3.75 times more return on investment than ANZ Group. However, Zhihu is 3.75 times more volatile than ANZ Group Holdings. It trades about 0.07 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about -0.11 per unit of risk. If you would invest 330.00 in Zhihu Inc ADR on September 12, 2024 and sell it today you would earn a total of 50.00 from holding Zhihu Inc ADR or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Zhihu Inc ADR vs. ANZ Group Holdings
Performance |
| Timeline |
| Zhihu Inc ADR |
| ANZ Group Holdings |
Zhihu and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and ANZ Group
The main advantage of trading using opposite Zhihu and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.The idea behind Zhihu Inc ADR and ANZ Group Holdings 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.| ANZ Group vs. Verde Clean Fuels | ANZ Group vs. Eastern Co | ANZ Group vs. Titan Machinery | ANZ Group vs. Tradeweb Markets |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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