Correlation Between Zhihu and BOS Better
Can any of the company-specific risk be diversified away by investing in both Zhihu and BOS Better 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 BOS Better 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 BOS Better Online, you can compare the effects of market volatilities on Zhihu and BOS Better 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 BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and BOS Better.
Diversification Opportunities for Zhihu and BOS Better
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhihu and BOS is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online 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 BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of Zhihu i.e., Zhihu and BOS Better go up and down completely randomly.
Pair Corralation between Zhihu and BOS Better
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the BOS Better. But the stock apears to be less risky and, when comparing its historical volatility, Zhihu Inc ADR is 2.27 times less risky than BOS Better. The stock trades about -0.01 of its potential returns per unit of risk. The BOS Better Online is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 331.00 in BOS Better Online on November 3, 2024 and sell it today you would earn a total of 41.00 from holding BOS Better Online or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. BOS Better Online
Performance |
| Timeline |
| Zhihu Inc ADR |
| BOS Better Online |
Zhihu and BOS Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and BOS Better
The main advantage of trading using opposite Zhihu and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.The idea behind Zhihu Inc ADR and BOS Better Online 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.| BOS Better vs. Mynaric AG ADR | BOS Better vs. Knowles Cor | BOS Better vs. Comtech Telecommunications Corp | BOS Better vs. Ituran Location and |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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