Correlation Between Zhihu and BCB Bancorp
Can any of the company-specific risk be diversified away by investing in both Zhihu and BCB Bancorp 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 BCB Bancorp 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 BCB Bancorp, you can compare the effects of market volatilities on Zhihu and BCB Bancorp 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 BCB Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and BCB Bancorp.
Diversification Opportunities for Zhihu and BCB Bancorp
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhihu and BCB is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp 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 BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of Zhihu i.e., Zhihu and BCB Bancorp go up and down completely randomly.
Pair Corralation between Zhihu and BCB Bancorp
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the BCB Bancorp. In addition to that, Zhihu is 1.75 times more volatile than BCB Bancorp. It trades about -0.01 of its total potential returns per unit of risk. BCB Bancorp is currently generating about -0.01 per unit of volatility. If you would invest 1,683 in BCB Bancorp on September 3, 2024 and sell it today you would lose (356.00) from holding BCB Bancorp or give up 21.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. BCB Bancorp
Performance |
| Timeline |
| Zhihu Inc ADR |
| BCB Bancorp |
Zhihu and BCB Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and BCB Bancorp
The main advantage of trading using opposite Zhihu and BCB Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, BCB Bancorp 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 BCB Bancorp will offset losses from the drop in BCB Bancorp's long position.The idea behind Zhihu Inc ADR and BCB Bancorp 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.| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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